tg 24-9-2018 report - tariq glass industries€¦ · bankers national bank of pakistan habib bank...

TG TARIQ GLASS INDUSTRIES LTD.

1

C O N T E N T S

COMPANY INFORMATION

VISION STATEMENT & MISSION STATEMENT

NOTICE OF ANNUAL GENERAL MEETING (ENGLISH)

CHAIRMAN’S REVIEW REPORT (ENGLISH )

STATEMENT OF COMPLIANCE WITH THE LISTED COMPANIES (CODE OF CORPORATE GOVERNANCE) REGULATIONS, 2017

REVIEW REPORT ON THE STATEMENT OF COMPLIANCE CONTAINED IN LISTED COMPANIES (CODE OF CORPORATE GOVERNANCE) REGULATIONS, 2017

INDEPENDENT AUDITOR’S REPORT

STATEMENT OF FINANCIAL POSITION

STATEMENT OF PROFIT OR LOSS

STATEMENT OF OTHER COMPREHENSIVE INCOME

CASH FLOW STATEMENT

STATEMENT OF CHANGES IN EQUITY

NOTES TO THE FINANCIAL STATEMENTS

FINANCIAL STATISTICAL SUMMARY

PATTERN OF SHAREHOLDING

CATEGORIES OF SHAREHOLDERS

IMPORTANT NOTES FOR THE SHAREHOLDERS

FORM OF PROXY (ENGLISH / )

2

3

4

6

7

16

18

19

24

25

26

27

28

29

6970

71

73

78

85

86

87-88

DIRECTORS' REPORT (ENGLISH )

D E S C R I P T I O N PAGE No.


2

COMPANY INFORMATION BOARD OF DIRECTORS CHAIRMAN

MANAGING DIRECTOR / CEO

DIRECTORS

COMPANY SECRETARY MR. MOHSIN ALI

AUDIT COMMITTEE CHAIRMAN MEMBERMEMBER

AUDITORS KPMG TASEER HADI & CO.CHARTERED ACCOUNTANTS, LAHORE

LEGAL ADVISOR KASURI AND ASSOCIATES, LAHORE

MR. RASHID SADIQ, M/S R.S. CORPORATE ADVISORY, LAHORETAX CONSULTANTS YOUSAF ISLAM ASSOCIATES, LAHORE

BANKERS NATIONAL BANK OF PAKISTAN HABIB BANK LTDUNITED BANK LTDTHE BANK OF PUNJABMCB BANK LTDTHE BANK OF KHYBERASKARI BANK LTDMEEZAN BANK LTDALLIED BANK LTD

SHARES REGISTRAR SHEMAS INTERNATIONAL (PVT) LTD.533 - Main Boulevard, Imperial Garden Block,Paragon City, Barki Road, Lahore.Ph: +92-42-37191262E-mail: [email protected]

REGISTERED OFFICE 128-J, MODEL TOWN, LAHORE.UAN : 042-111-34-34-34FAX : 042-35857692 - 35857693E MAIL : [email protected]: www.tariqglass.com

WORKS 33-KM, LAHORE/SHEIKHUPURA ROADTEL: (042) 37925652, (056) 3500635-7FAX: (056) 3500633

HUMAN RESOURCE & REMUNERATION COMMITTEE

CHAIRMAN MEMBERMEMBER

BANK ALFALAH LTDFAYSAL BANK LTDJ.S. BANK LTDBANKISLAMI PAKISTAN LTDBANK ALHABIB LTDSAMBA BANK LTD AL-BARAKA BANK (PAK) LTDSTANDARD CHARTERED BANK (PAK) LTD

MR. OMER BAIG

MR. MANSOOR IRFANI

CHIEF FINANCIAL OFFICER MR. WAQAR ULLAH

INDEPENDENT DIRECTORINDEPENDENT DIRECTOR

MR. MOHAMMAD BAIGMR. SAAD IQBALMS. RUBINA NAYYARMR. TAJAMMAL HUSSAIN BOKHAREEMR. FAIZ MUHAMMAD

MR. TAJAMMAL HUSSAIN BOKHAREEMR. OMER BAIGMR. MANSOOR IRFANIMR. TAJAMMAL HUSSAIN BOKHAREEMS. RUBINA NAYYARMR. MANSOOR IRFANI

CORPORATE CONSULTANTS


3

Vision StatementTo be a premier glass manufacturing organization of International

standards and repute, offering innovative value-added products, tailored respectively to the customer’s needs and satisfaction. Optimizing the shareholder’s value through meeting their expectations, making Tariq

Glass Industries Limited an “Investor Preferred Institution” is one of our prime policies. We are a “glassware supermarket” by catering all

household and industrial needs of the customers under one roof.

Mission Statement To be a world class and leading company continuously providing quality glass tableware, containers and float by utilizing best blend of state-of-the-art technologies, highly professional staff, excellent business processes

and synergistic organizational culture.


4

NOTICE OF ANNUAL GENERAL MEETING

NOTES1. The Share Transfer Books of the Company will remain closed from October 20, 2018 to October 27, 2018

(both days inclusive). Transfers received in order at the office of Share Registrar of the Company namely M/s Shemas International (Private) Limited, 533 - Main Boulevard, Imperial Garden Block, Paragon City, Barki Road, Lahore (Phone: 0092-42-37191262; Email: [email protected]) at the close of business hours on October 19, 2018 will be treated in time for the purpose of transfer of shares and payment of cash dividend, if approved by the shareholders.

2. The members are advised to bring their ORIGINAL Computerized National Identity Card (CNIC) and those members who have deposited their shares in Central Depository System should also be cognizant of their CDC Participant ID and Account Number at the meeting venue. In case of corporate entity, the Board of Directors' resolution / power of attorney with specimen signature of the nominee shall be produced at the time of the meeting.

3. All members are entitled to attend and vote at the meeting. A member entitled to attend and vote at the meeting is also entitled to appoint another member of the Company as his/her proxy to attend, speak and vote for him/her. In case of corporate entity, the Board of Directors' resolution / power of attorney with specimen signature shall be submitted along with proxy form to the Company. A proxy must be a member of the Company. A member shall not be entitled to appoint more than one proxy to attend any one meeting. The instrument of proxy duly executed should be lodged at the Registered Office of the Company not later than 48 hours before the time of meeting. The form of proxy must be witnessed with the addresses and CNIC numbers of witnesses, certified copies of CNIC of member and the proxy member must be attached and the revenue stamp should be affixed and defaced on the form of proxy.

4. Pursuant to the directives of Securities & Exchange Commission of Pakistan (SECP) inter alia vide SRO 779 (1) 2011 dated August 18, 2011, SRO 831(1)/2012 dated July 05, 2012, and SRO 19(1) 2014 dated January 10, 2014, it is necessary to mention the Member's computerized national identity card (CNIC) number for the payment of dividend, members register and other statutory returns. Members are therefore requested to

thThe Notice is hereby given that the 40 Annual General Meeting of the members of the Company will be held on Saturday, the October 27, 2018 at 11:00 AM at the Defence Services Officers' Mess, 71 – Tufail Road, Lahore Cantt to transact the following business:

ORDINARY BUSINESS:

th1. To confirm the minutes of the 39 Annual General Meeting of the members held on October 28, 2017.2. To receive, consider and adopt the Audited Financial Statements of the Company for the year ended June 30,

2018 together with the Chairman's Review Report, Directors' Report and Auditor's Report thereon.3. To approve the payment of cash dividend @ 60% (i.e., Rs. 6.00 per share) for the year ended June 30, 2018 as

recommended by the Board of Directors.4. To appoint Auditors of the Company for the year ending June 30, 2019 and fix their remuneration. The retiring

auditors M/s KPMG Taseer Hadi & Co., Chartered Accountants being eligible offer themselves for reappointment.

OTHER BUSINESS:

5. To transact any other business with the permission of the Chairman.

October 01, 2018Lahore

BY ORDER OF THE BOARD

(MOHSIN ALI)

COMPANY SECRETARY


5

submit a copy of their valid CNIC (if not already provided) by mentioning their folio numbers to the Share Registrar of the Company failing which result in withholding of dividend payments to such members.

5. In terms of section 242 of the Companies Act, 2017, it is mandatory for the listed companies to pay cash dividend electronically directly into the designated bank account of a shareholder instead of paying the dividend through dividend warrants. Therefore, it has become essential for all of our valued shareholders to provide the International Bank Account Numbers (“IBAN”s) and other details of their designated Bank Account. In this regard, please send the complete details of your bank account including IBAN along with valid copy of your CNIC at the address of the Share Registrar of the Company. The form titled as “Electronic Dividend Mandate Form” is available on website of the Company, send it duly signed along with copy of your valid CNIC to the Share Registrar of the Company. In case shares are held in CDC account then “Electronic Dividend Mandate Form” should be sent directly to the relevant broker / CDC Investor Account Services where Member's CDC account is being maintained.

6. In pursuance of applicable tax laws the withholding of tax is required to be made at the time of payment of dividend and it has been directed that all non-filers of Income Tax returns will be taxed at higher rate (i.e., 20%) as compared to filers of Income Tax returns who will be taxed at normal rate (i.e., 15%). The non-filers of Income Tax returns are those persons whose names are not appearing in Active Tax-payers List (ATL) provided on the website of FBR upto October 19, 2018 (i.e., the day before the start of book closure date). Despite the fact that members have filed the income tax returns but if their names are not appearing in ATL will still be considered as non-filer, are advised to immediately make sure that their names are entered and appearing in ATL upto October 19, 2018. The Members are also advised to send formal and valid tax exemption certificate if they are enjoying exemption from withholding of tax on dividend under any of the provisions of Income Tax Ordinance 2001 to the Share Registrar of the Company before the book closure date i.e., before the close of business hours on October 19, 2018, so the deduction of withholding tax from their dividend could be restrained.

7. In case of Joint Holders withholding tax will be determined separately on Filer / Non-Filer status of Senior / Principal shareholder as well as Joint Holders based on their shareholding proportions. In this regard, all Members who hold share with joint shareholders are requested to provide shareholding proportions (as per the form titled as “Shareholding Proportion” available on website of the Company) of Senior / Principal shareholder and Joint Holders in respect of share held by them to the Share Registrar of the Company.

8. Members may participate in the meeting via video-link facility subject to availability of this facility in that city and consent from members (form titled as “Consent for Video Conference” is available on website of the Company). The members must hold in aggregate 10% or more shareholding residing in that city and consent of shareholders must reach at the registered address of the Company at least 10 days prior to the general meeting in order to participate in the meeting through video conference. The Company will intimate members regarding venue of video conference facility at least 5 days before the date of general meeting along with complete information necessary to enable them to access such facility.

9. Shareholders who could not collect their dividend / physical shares are advised to contact the Company Secretary at the registered office of the Company to collect / enquire about their unclaimed dividend or shares, if any.

10 The members are requested to notify the change of address and Zakat declaration, if any, immediately to our Share Registrar.


6

It is informed with deep sorrow and grief that the founding father of this organization, respected Mr. Tariq Baig, passed away on January 18, 2018 ـ راجعونـ ا إليه ,May Allah rest his soul in eternal peace. Mr. Baig's vision .إنا لله وإنـ

ideology, thoughts and work will be remembered for decades to come. He was a dynamic leader across all domains, from the intellectual and the organizational to the ethical and the human. Most importantly, he was a model of integrity who exemplified and stewarded organizational values of honesty, responsibility, empathy, and public service.Tariq Glass Industries Limited has made tremendous progress over the years to be where it stands today - The Leading Glass Industry in Pakistan. This splendid progress is attributable to the blessings of Almighty Allah, untiring effort of the work force, adoption of correct strategies and their timely implementation by the management. The record Net Sales of Rs. 12,302 million, Profit After Tax of Rs. 1,097 million and Earnings per Share of Rs. 14.94 registered by the Company in the financial year 2017-2018 justify our claim as the leader of glass industry of the country.As required under section 192 of the Companies Act 2017, it is hereby reported that an annual evaluation of the Board of Directors (the “Board”) of Tariq Glass Industries Limited (the “Company”) has been carried out. The purpose of this evaluation is to ensure that the Board's overall performance and effectiveness is assessed and benchmarked against anticipations in line with the objectives set for the Company. Areas where improvements are required are duly considered and action plans are formulated. The Board has completed its annual self-evaluation for the year ended June 30, 2018 and I hereby report that the overall performance of the Board assessed on the basis of guidelines / questionnaire for the year was satisfactory. The assessment criteria is based on evaluation of the following variables, which have a direct relevance on Board's role in attainment of Company's objective:

1. Vision, mission and values: The Board members have a clear understanding about Company's vision, mission and values and promote them.2. Strategic planning & engagement: The Board members empathize all the stakeholders (shareholders, customers, employees, vendors, government, and society at large) whom the Company serves. The Board has evolved strategic planning that how the organization should be progressing over the next three to five years. Further, Board sets goals and objectives on annual basis for the management in all major areas of business and community.3. Organization's business activities: The Board remained updated with respect to achievement of Company's goals & objectives and implementation of plans & strategies and review of financial performance through regular analysis of MIS, presentations by the management, internal and external auditors report and other opinions and feedback. The Board members provide appropriate direction and guidance on a timely basis. It received clear and brief agendas with supporting written material and sufficient time prior to board and committee meetings. The board met frequently enough to adequately discharge its responsibilities.4. Assiduity & monitoring: The Board members have developed system of sound internal control with emphasis on financial matters and implemented at all levels within the Company. The Board members diligently performed their duties and thoroughly reviewed, discussed and approved business strategies, corporate objectives, plans, budgets, financial statements and other reports. 5. Board Diversification: The Board members successfully brought diversity on the Board by constituting a mix of independent, non-executive and executive directors. The representation to one female director is also given. These independent, female and non-executive directors were equally involved in important board decisions. The Board members are also specialized in specific areas like management, accounts & finance, marketing, glass manufacturing, public relations, prevalent laws etc.6. Governance: The Board members have efficiently set the tone-at-the-top, by positioning the transparent and robust system of governance in front of the organization's people. The achievement of this phenomena is led by setting up an effective control environment, compliance with best practices of corporate governance, advocating code of conduct, promoting ethical and fair behavior across the Company and supporting behavior for the whistle blower.

CHAIRMAN'S REVIEW REPORT

MANSOOR IRFANI CHAIRMAN

Lahore, October 01, 2018


7

DIRECTORS’ REPORTThe Directors of Tariq Glass Industries Limited are pleased to present before you the performance report together with the annual audited financial statements of the company along-with the auditors' reports thereon, for the year ended June 30, 2018.

Economy Review:

The Economic growth momentum in Pakistan remained above 5 percent in a row for the last two years and reached 5.79 percent in FY2018 which is highest in last 13 years on account of a strong performance in agriculture, industry and services sectors. However, the higher trade deficit and depleting foreign exchange reserves caused massive devaluation of Pak Rupee in the recent past thus the import of machinery, spares, oil and raw materials has become more expensive. On the other hand tight monetary policy announced by upward revision of base rate will result in higher finance cost for business. We believe that Pakistan can maintain a stronger growth trajectory through domestic and regional stability by improving overall competitiveness, revitalizing public sector enterprises, as well as timely completion and effective use of infrastructure projects.

Business Review:

By the Grace of Allah Almighty, the Company has registered record net sales of Rs.12,302 million against Rs. 9,903 million in the previous year showing a robust growth of 24.23%. The profit after tax and EPS for the period under report are Rs.1,097 million and Rs. 14.94 as compared to corresponding figures of last year of Rs. 760 million and Rs. 10.34 respectively.

The lucrative profitability is attributable to efficient monitoring and development of operating procedures, implementation of effective marketing plans, promotional schemes and media campaigns to secure volumes of tableware as well as float glass produce. Consequently, the Company succeeded in increased consumption of its goods through demand pull strategy. The key operating and financial data in summarized form is also annexed for the consideration of shareholders. The financial results in brief are as under:

FY-2017

(Rupees in Million) Sales – net

FY-2018

Gross profit Operating profit Profit before tax Profit after tax Earnings per share – basic and diluted – Rupees

12,3022,3241,5791,4251,097

14.94

9,903 2,018 1,434 1,185 760

10.34

By the grace of Allah Almighty, the company's production facilities were fully functional during the current financial year whereas the commercial operations from the produce of Opal Glass furnace were started on 29 March 2018. Resultantly higher inventories of glass products were available for sale thus remarkable growth in sales volumes was achieved during the period under report.

The Board of Directors is pleased to recommend the payment of cash dividend at the rate of 60% (i.e. Rs. 6.00 per share) for the year ended June 30, 2018.


8

Corporate and Financial Reporting Framework:

(a) The financial statements, prepared by the management of the listed company, present its state of affairs fairly, the result of its operations, cash flows and changes in equity. (b) Proper books of account of the listed company have been maintained. (c) Appropriate accounting policies have been consistently applied in preparation of financial statements and accounting estimates are based on reasonable and prudent judgment. (d) International Financial Reporting Standards, as applicable in Pakistan, have been followed in preparation of financial statements and any departure therefrom has been adequately disclosed and explained. (e) The systems of internal control whether financial or non-financial are sound in design and has been effectively implemented and monitored. (f) There are no significant doubts upon the listed company's ability to continue as a going concern. (g) The information about taxes and levies is given in the notes to the financial statements. (h) There has been no departure from the best practices of Corporate Governance as detailed in the Listed Companies (Code of Corporate Governance) Regulations,2017. A statement to this effect is annexed with this report.

Internal Financial Control:

A system of sound internal financial control is developed and implemented at all levels within the company. The system of internal financial control is sound in design for ensuring achievement of company's objective its operational effectiveness and efficiency, reliable financial reporting and compliance with laws, regulations and policies.

Board of Directors:

On behalf of all the members of the Board, it is informed with deep sorrow and grief that respected Mr. Tariq Baig, the founding father of this organization passed away on January 18, 2018 إنا لله وإنـا إليه راجعونـ. May Allah rest his

soul in eternal peace.

The Board of Directors completed its tenure of three years on September 02, 2017. The election of directors was adjudicated in the Extra Ordinary General Meeting held on August 30, 2017 under the provisions of section 159 of the Companies Act 2017 for the next term of three years (i.e., from September 3, 2017 to September 2, 2020) by the shareholders of the Company. The name of Board members before and after the date of election are given below:

1. Mr. Tariq Baig (Late) Mr. Tariq Baig (Late) Died on 18/01/2018

2.

Mr. Omer Baig

Mr. Omer Baig

Continuing Director and Appointed as Managing Director on 25/01/2018 after the sad demise of Mr. Tariq Baig (Late)

Sr.

Name of Directors on the Board of Current

Term (i.e., from September 03, 2017 to September 02, 2020)

Remarks

Name of Directors on the Board of Previous

Term (i.e., upto September 02, 2017)


9

Composition of Board:

The current composition of the Board of Directors in compliance with the requirements of Listed Companies (Code of Corporate Governance) Regulations, 2017 is as under:

Total number of Directors are 7 of which:

(a) Male Directors are: 6 (b) Female Director is: 1

Further, from the board of 7 directors the status wise summary is as under:

i. Independent Directors: 2 ii. Non- Executive Directors: 3 iii. Executive Directors: 2

Furthermore, at present the following directors are serving on the Board of Directors of the Company:

Status / Category Names

Independent Director: Mr. Tajammal Hussain Bokharee Mr. Faiz Muhammad

Non-Executive Directors: Mr. Mansoor Irfani (Chairman) Ms. Rubina Nayyar Mr. Saad Iqbal

Executive Directors: Mr. Omer Baig (Managing Director/CEO) Mr. Mohammad Baig

3.

Mrs. Naima Shahnaz Baig

Mrs. Naima Shahnaz Baig

Resigned on 28/10/2017

4.

Mr. Mansoor Irfani

Mr. Mansoor Irfani

Continuing Director

5.

Mr. Tajammal Hussain Bokharee

Mr. Tajammal Hussain Bokharee

Continuing Director

6.

Mr. David Julian

-

Not participated in election for the current term

7.

Mr. Naeem Nazir

-

8. - Mr. Mohammad Baig Continuing Director 9. - Mr. Saad Iqbal Continuing Director 10. - Ms. Rubina Nayyar Co-opted director in place

of Mrs. Naima Shahnaz Baig and Continuing Director

11.

-

Mr. Faiz Muhammad

Sr.

Name of Directors on the Board of Current

Term (i.e., from September 03, 2017 to September 02, 2020)

Remarks

Name of Directors on the Board of Previous

Term (i.e., upto September 02, 2017)

Not participated in election for the current term

Co-opted director in place of Mr. Tariq Baig (Late)and Continuing Director


10

The following vacancies occurred on the board and were filled up by the directors:

Date Director

(Resigned / Died)

Vacancy

Occurred Date of

Co-option /Appointment

Name of

Co-opted / AppointedDirector

October 28, 2017 Mrs. Naima

Shahnaz Baig Director

November 03, 2017 Ms. Rubina

NayyarMember of Audit

Committee November 03, 2017

Ms. Rubina Nayyar

January 18, 2018

Mr. Tariq Baig (Late)

Managing Director

January 25, 2018 Mr. Omer Baig

Director March 20,

2018 Mr. Faiz

MuhammadMember of

Human Resource &

Remuneration Committee

January

25, 2018

Mr. Omer Baig

Mr.Tajammal Hussain Bokharee being an independent director was also appointed as Chairman of the Human Resource & Remuneration Committee in place of Mr. Mansoor Irfani. However, Mr. Mansoor Irfani is continuing as member of Human Resource & Remuneration Committee

During the period under report a sum of Rs 574.824 million was repaid to the sponsor directors against the interest free loan provided by them. This repayment of interest free sponsors' loan was allowed by the Board of Directors of the Company w.e.f. May 31, 2017.

Board Meetings:

During the year, 6 meetings of the board were held. The attendance of the Board members was as follows:

Sr. Name of Director

Total Board Meetings Eligible to Attend

Board Meetings Attended

1. Mr. Omer Baig

6

6

2. Mr. Mansoor Irfani

6

5

3. Mr. Tajammal Hussain Bokharee

6

4

4. Mr. Mohammad Baig

5

5

5. Mr. Saad Iqbal

5

4

6. Mr. Tariq Baig (Late) 4 4

7. Mrs. Naima Shahnaz Baig 2 2 8. Ms. Rubina Nayyar 2 2 9. Mr. Faiz Muhammad 1 1

10. Mr. David Julian 1 1 11. Mr. Naeem Nazir 1 1


11

Committees of the Members of the Board of Directors:

The Board has constituted Audit Committee (AC) and Human Resource & Remuneration Committee (HR & R Committee) for its assistance. The details of members and scope are as under:

Audit Committee

1. Mr. Tajammal Hussain Bokharee – Chairman AC (Independent Director) 2. Mr. Mansoor Irfani – Member 3. Ms. Rubina Nayyar – Member

Audit Committee reviewed the quarterly, half yearly and annual financial statements before submission to the board and their publication. The audit committee also reviewed internal audit findings and held separate meetings with internal and external auditors. The audit committee had detailed discussions with external auditors on their letter to the management.

During the year under report, 4 meetings of the audit committee were held. The attendance of the members of audit committee was as follows:

Sr.

Name of Director Total Audit

Committee MeetingsEligible to Attend

Audit Committee Meetings Attended

1 Mr. Tajammal Hussain Bokharee 4 4

2 Mr. Mohammad Baig 3 3 3 Mrs. Rubina Nayyar 2 2 4 Mrs. Naima Shahnaz Baig 2 2 5 Mr. Mansoor Irfani 1 -

Human Resource & Remuneration Committee

1. Mr. Tajammal Hussain Bokharee – Chairman HR & R Committee (Independent Director) 2. Mr. Omer Baig – Member 3. Mr. Mansoor Irfani - MemberThe committee has been constituted to address and improve the area of Human Resource Development. The main aim of the committee is to assist the Board and guide the management in the formulation of the market driven HR policies regarding performance management, HR staffing, compensation and benefits, that are compliant with the laws and regulations.

During the year under report, 3 meetings of the human resource & remuneration committee were held. The attendance of the members of human resource & remuneration committee was as follows:

Total HR & R Committee Meetings

Eligible to

Attend

3

3 2 1

Sr. Name of Director

HR & R CommitteeMeetingsAttended

1

Mr. Tajammal Hussain Bokharee 3

2 Mr. Mansoor Irfani 3 3 Mr. Omer Baig 2 4 Mr. Tariq Baig (Late) 1


12

Remuneration of Directors & Related Party Transactions:

The remuneration of directors is determined by the Board of Directors in accordance with the requirements of the Companies Act 2017, the regulations and Articles of Association of the Company. The remuneration paid to the directors is disclosed under Note No. 38 of the annexed Notes to the Financial Statements.

All the related party transactions are disclosed under Note No. 40 of the annexed Notes to the Financial Statements.

Directors Training Program:

During the period under report there were two certified directors on the board. After the balance sheet date the Company arranged directors training program for the following directors:

- Mr. Tajammal Hussain Bokharee - Mr. Mansoor Irfani - Mr. Faiz Muhammad

As on date of signing of this report there were total five certified directors on the Board. The remaining two directors will fulfill the requirements of directors training program within the stipulated time frame.

However, the briefing on respective laws, regulations and the Company’s Memorandum and Articles of Association have been provided to all the directors. Thus they are well conversant with their duties and responsibilities.

Pattern of Shareholding:

The pattern of shareholding as required under the Companies Act 2017 is attached separately with this report.

The following transactions in the shares of the Company were carried out by the Directors and the associated company for the period under report.

Name of Directors / Associated

Company

Nature of

Transactions

Other Party

No. ofShares

Tariq Baig (Late)

Gift to

Mr. Mohammad Baig

1,000,000

Purchased from

M/s Industrial Products Investments Limited

5,000,000

Mohammad Baig

Gift Received

from


1,000,000

Mrs. Naima Shahnaz Baig 640,396

Purchased from

Qinhuangdao Yaohua Glass Machine Manufacturer Company Ltd.

210,000

Purchased from Open Market 7,300

M/s M & M Glass (Private) Limited (Associated Company)

Purchased from

M/s Industrial Products Investments Limited

928,844


13

During the period between the end of financial year to which the attached financial statements relate and the date of this Directors' Report, the following transactions in the shares of the Company were carried out by the Directors of the Company :

Name of Director Nature of Transactions Other Party No. of

Shares

Omer Baig Received /

Transmitted


18,662,864

Mohammad Baig Purchased from Open Market 27,500

Number of Employees:

The number of permanent employees as at June 30, 2018 were 914 (2017: 818).

Value of Investments of Provident Fund:

The value of total investment of provident fund as at June 30, 2018 was Rs. 109.705 million (2017: Rs. 94.938 million).

Financial Statements:

As required under the Listed Companies Code of Corporate Governance Regulations, 2017 the Managing Director and Chief Financial Officer presented the financial statements, duly endorsed under their respective signatures, for consideration and approval of the Board of Directors and Board after consideration authorized the signing of financial statements for issuance and circulation on October 01, 2018.

The financial statements of the Company have been duly audited and approved without qualification by the auditors of the Company M/s KPMG Taseer Hadi & Co., Chartered Accountants and their following reports are attached with the financial statements:

· Auditors' Report to the Members · Review Report on the Statement of Compliance contained in Listed Companies (Code of Corporate Governance) Regulations, 2017.

During the period between the end of financial year to which the attached financial statements relate and the date of this Directors' Report no material changes and commitments affecting the financial position of your Company have occurred except that by the grace of Allah Almighty the Company held the earth breaking ceremony of Float Glass Plant (Unit–II) on September 12, 2018. This plant will be capable of producing 500 tons per day of float glass.

Future Outlook:

As a part of Company's horizontal integration strategy, the Company successfully completed the installation of Opal Glass Dinnerware Project and commercialized its production on March 29, 2018. Alhamdulillah, the response of the market regarding acceptability of Company's opal glass dinnerware products with the brand name of ROCKWARE is indeed amiable. This marvel will Insha`Allah lead to higher sales volume and value in the following quarters. The quality and colour of derived production of opal glass meets the international quality standards and the Company will efficiently compete with the imported products as far as the quality and pricing is concerned. The Management is confident that the import of opal glass dinnerware in the Country will minimize in near future.


14

You are aware that the Board of Directors approved in principle the enhancement of manufacturing facilities with a capacity of 500 tons per day for which the Company has purchased the land measuring 18 acres (approximately) adjacent to the existing production facilities of the Company and sought long term financing amounting to Rs. 5.60 billion approximately from various banks for this project. The Company's existing financier banks honored the Company with their participation in this project. The Company has finalized the supply of main plant and ancillary components of the plant with M/s Qinhuangdao Yaohua Glass Machine Manufacturer Company Limited of China. By the grace of Allah Almighty the Company held the earth breaking ceremony of Float Glass Plant (Unit–II) on September 12, 2018. The commissioning period of this plant is 18 months subject to irrefutable external factors.

Competition in the tableware and float market will remain tough as the major players have invested on channel partners and influencers by offering higher discounts and lucrative promotional schemes. The competitor of float glass is increasing its production capacities which may affect the prices and cost of sales in the future. Your Company will capture the market (Insha Allah) by promoting sales of its products, by increasing range of tableware products and new value added products of Opal glass Dinnerware coupled with continuous availability of Float Glass products in the market. The focus will also be on introduction of fresh promotional schemes to engage the trade channels in order to support volumetric sales. Our media campaign will continue from time to time on television and radio channels to motivate people and increase brand loyalty.

The increasing current account deficit and depleting foreign exchange reserves of the Country may perhaps create pressure for further devaluation of Pak Rupee, consequently the import bill of the Company may rise. Due to the tight monetary policy the base rate has revised upward which will result in higher finance cost.

State Bank of Pakistan has imposed restrictions on advance payment against establishment of foreign letter of credit due to which delays are being faced for the import of new plant & machinery, spares and raw materials. This phenomenon may result in delays both as to the existing as well as the commissioning of new Float Glass Plant (Unit-II).

The Company has opted for the RLNG tariff in order to avail uninterrupted supply of gas but the ever increasing prices of oil and gas make the cost of Power & Fuel costlier with every passing month. The gross margins of the Company for the next financial year are expected to remain under pressure owing to this factor and massive devaluation of Pak Rupee.

Despite these odds, we are hopeful that economic activities will flourish and the Company shall continue its path in further improving its performance.

Auditors:

The present auditors M/s KPMG Taseer Hadi & Co., Chartered Accountants have completed their term of appointment and offer themselves for reappointment. As suggested by the audit committee the board of directors has recommended their reappointment as auditors of the company for the financial year ending June 30, 2019 at a fee to be mutually agreed.


For and on behalf of the Board

Corporate Social Responsibility (CSR)

Tariq Glass Industries Limited maintains focus on investing in its communities. In accordance with the Company's CSR Policy, the focus is primarily on education, health, community and environment. The Company also supports civic development through investment in community projects, disaster relief and rehabilitation activities as needed. The Company has spent Rs. 7.288 million (2017: Rs. 7.815 million) on account of CSR activities during the period under report.

In its efforts to sustain the environment, the Company responded appropriately to curtail flow of waste water and carbon emissions into the atmosphere. Your Company has a comprehensive air quality measurement program that enables it to identify the limits of pollution parameters in the ambient air in and around the plant site. All of the parameters monitored are well below their respective limits specified in the National Environmental Quality Standards (NEQS). Similarly, the levels of emissions from stacks of Silica Sand, Lime Stone and other raw materials are continuously monitored and well controlled.

Authorization to Sign Directors' Report & Statement of Compliance:

Mr. Mansoor Irfani, Chairman and Mr. Omer Baig, Managing Director were authorized jointly to sign the Directors' Report, Statement of Compliance with Listed Companies (Code of Corporate Governance) Regulations, 2017 and audited financial statements on behalf of the Board, whereas Mr. Waqar Ullah, CFO will also sign the audited financial statements pursuant to section 232 of the Companies Act 2017.

Acknowledgement:

We would like to thank our valued distributors, clients, suppliers, banks and financial institutions and also the shareholders of the company for their continued trust and confidence. We also appreciate the efforts and dedication shown by the staff for managing the company's affairs successfully and all the workers who worked hard to achieve the higher goals.

15

OMER BAIGMANAGING DIRECTOR / CEO

MANSOOR IRFANICHAIRMANLahore, October 01, 2018


16

STATEMENT OF COMPLIANCE WITH THE LISTED COMPANIES (CODE OF CORPORATE GOVERNANCE) REGULATIONS, 2017

Name of Company: Tariq Glass Industries LimitedYear Ended: June 30, 2018

Tariq Glass Industries Limited (“the Company”) has complied with the requirements of the Listed Companies (Code of Corporate Governance) Regulations, 2017 (“the Regulations) in the following manner:

1. The total number of directors are seven as per the following:

Male: Six Female: One

2. The composition of the board is as follows: Category Names

a. Independent Directors: Mr. Tajammal Hussain Bokharee Mr. Faiz Muhammad b. Non-Executive Directors: Mr. Mansoor Irfani Ms. Rubina Nayyar Mr. Saad Iqbal c. Executive Directors: Mr. Omer Baig Mr. Mohammad Baig

3. The directors have confirmed that none of them is serving as a director on more than five listed companies, including this company (excluding the listed subsidiaries of listed holding companies).

4. The company has prepared a “Code of Conduct” and has ensured that appropriate steps have been taken to disseminate it throughout the company along with its supporting policies and procedures.

5. The board has developed a vision/mission statement, overall corporate strategy and significant policies of the company. A complete record of particulars of significant policies along with the dates on which they were approved or amended has been maintained.

6. All the powers of the board have been duly exercised and decisions on relevant matters have been taken by board / shareholders as empowered by the relevant provisions of the Act and these Regulations.

7. The meetings of the board were presided over by the Chairman and in his absence, by a director elected by the board for this purpose. The board has complied with the requirements of Act and the Regulations with respect to frequency, recording and circulating minutes of meeting of board.

8. The board of directors have a formal policy and transparent procedures for remuneration of directors in accordance with the Act and these Regulation.

9. During the period under report there were two certified directors on the board. After the balance sheet date the Company arranged directors training program for the following directors:

- Mr. Tajammal Hussain Bokharee - Mr. Mansoor Irfani - Mr. Faiz Muhammad

As on date of signing of this report there were total five certified directors on the Board. The remaining two directors will fulfill the requirements of directors training program within the stipulated time frame.


17

10. The board has approved one new appointment of the Head of Internal Audit during the year. However, no new appointments have been made for the Chief Financial Officer (CFO) and the Company Secretary during the year. All such appointments including their remuneration and terms and conditions of employment are duly approved by the Board and complied with relevant requirements of the Regulations.

11. Chief Financial Officer and Chief Executive Officer duly endorsed the financial statements before approval of the board.

12. The board has formed committees comprising of members given below:

a) Audit Committee

- Mr. Tajammal Hussain Bokharee (Chairman) - Mr. Mansoor Irfani (Member) - Ms. Rubina Nayyar (Member)

b) Human Resource and Remuneration Committee

- Mr. Tajammal Hussain Bokharee (Chairman) - Mr. Omer Baig (Member) - Mr. Mansoor Irfani (Member)

13. The terms of reference of the aforesaid committees have been formed, documented and advised to the committee for compliance.

14. The frequency of meetings of the Committee were as per following:

a) Audit Committee: Quarterly meetings during the financial year ended June 30, 2018. b) Human Resource and Remuneration Committee: Yearly and as per requirement.

15. The board has set up an effective internal audit function who are considered suitably qualified and experienced for the purpose and are conversant with the policies and procedures of the company.

16. The statutory auditors of the company have confirmed that they have been given a satisfactory rating under the quality control review program of the Institute of Chartered Accountants of Pakistan (ICAP) and registered with Audit Oversight Board of Pakistan, that they or any of the partners of the firm, their spouses and minor children do not hold shares of the company and that the firm and all its partners are in compliance with International Federation of Accountants (IFAC) guidelines on code of ethics as adopted by the ICAP.

17. The statutory auditors or the persons associated with them have not been appointed to provide other services except in accordance with the listing regulations and the auditors have confirmed that they have observed IFAC guidelines in this regard.

18. We confirm that other material principles enshrined in the CCG have been complied with. Further, the Company has continued to present the details of all related party transactions before the Audit Committee and upon their recommendation to the Board for review and approval. The definition of related party used is in accordance with repealed Companies Ordinance, 1984 and applicable financial reporting framework as the regulations under Section 208 of the Companies Act, 2017 have not yet been announced.

For and on behalf of the Board

OMER BAIGMANAGING DIRECTOR / CEO

MANSOOR IRFANICHAIRMANLahore, October 01, 2018


18

To the members of Tariq Glass Industries Limited

Review Report on the Statement of Compliance contained in Listed Companies (Code of Corporate Governance) Regulations, 2017

We have reviewed the enclosed Statement of Compliance with the Listed Companies (Code of Corporate Governance) Regulations, 2017 (the Regulations) prepared by the Board of Directors of Tariq Glass Industries Limited for the year ended 30 June 2018 in accordance with the requirements of regulation 40 of the Regulations.

The responsibility for compliance with the Regulations is that of the Board of Directors of the Company. Our responsibility is to review whether the Statement of Compliance reflects the status of the Company's compliance with the provisions of the Regulations and report if it does not and to highlight any non-compliance with the requirements of the Regulations. A review is limited primarily to inquiries of the Company's personnel and review of various documents prepared by the Company to comply with the Regulations.

As a part of our audit of the financial statements we are required to obtain an understanding of the accounting and internal control systems sufficient to plan the audit and develop an effective audit approach. We are not required to consider whether the Board of Directors' statement on internal control covers all risks and controls or to form an opinion on the effectiveness of such internal controls, the Company's corporate governance procedures and risks.

The Regulations require the Company to place before the Audit Committee, and upon recommendation of the Audit Committee, place before the Board of Directors for their review and approval, its related party transactions and also ensure compliance with the requirements of section 208 of the Companies Act, 2017. We are only required and have ensured compliance of this requirement to the extent of the approval of the related party transactions by the Board of Directors upon recommendation of the Audit Committee. We have not carried out procedures to assess and determine the Company's process for identification of related parties and that whether the related party transactions were undertaken at arm's length price or not.

Based on our review, nothing has come to our attention which causes us to believe that the Statement of Compliance does not appropriately reflect the Company's compliance, in all material respects, with the requirements contained in the Regulations as applicable to the Company for the year ended 30 June 2018.

REVIEW REPORT ON THE STATEMENT OF COMPLIANCE CONTAINED IN LISTED COMPANIES (CODE OF CORPORATE GOVERNANCE) REGULATIONS, 2017

KPMG Taseer Hadi & Co.Chartered Accountants (M. Rehan Chughtai) Lahore, October 01, 2018


19

INDEPENDENT AUDITOR'S REPORTTo the members of Tariq Glass Industries Limited

Report on the audit of the Financial Statements

We have audited the annexed financial statements of Tariq Glass Industries Limited (“the Company”), which comprise the statement of financial position as at 30 June 2018, and the statement of profit or loss, the statement of other comprehensive income, the statement of changes in equity, the statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information, and we state that we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of the audit.

In our opinion and to the best of our information and according to the explanations given to us, the statement of financial position, statement of profit or loss, the statement of other comprehensive income, the statement of changes in equity and the statement of cash flows together with the notes forming part thereof conform with the accounting and reporting standards as applicable in Pakistan and give the information required by the Companies Act, 2017 (XIX of 2017), in the manner so required and respectively give a true and fair view of the state of the Company's affairs as at 30 June 2018 and of the profit, the comprehensive income, the changes in equity and its cash flows for the year then ended.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Pakistan. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants as adopted by the Institute of Chartered Accountants of Pakistan (the Code) and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.


20

Sr. No. Key audit matters How the matters were addressed in our audit

1. Revenue

Following are the Key audit matters.

Refer to note 4.17 and 24 to the financial statements.

The Company recognized revenue of Rs. 12,302 million from the sale of goods to domestic as well as export customers during the year ended 30 June 2018.

We identified recognition of revenue as a key audit matter because revenue is one of the key performance indicators of the Company and gives rise to a risk that revenue is recognized without transferring the risk and rewards.

Our audit procedures to assess the recognition of revenue included the following:

· obtaining an understanding of the process relating to recording of sales and testing the design, implementation and operating effectiveness of relevant key internal controls;

· assessing the appropriateness of the Company's accounting policies for recording of sales and compliance of those p o l i c i e s w i t h a p p l i c a b l e accounting standards;

· comparing a sample of sales transactions recorded during the year with sales orders, sales invoices, delivery challans, bill of ladings and other relevant underlying documents;

· comparing a sample of sales transactions recorded around the year end with the sales orders, sales invoices, delivery challans, bill of ladings and other relevant underlying documentation to assess if sale was recorded in the appropriate accounting period;

· inspecting on a sample basis, credit notes issued in June 2018 and July 2018 to evaluate whether the adjustments to sales had been accurately recorded in the appropriate accounting period; and

· scanning for any manual journal entries relating to sales recorded during the year which were considered to be material or met other specific risk based criteria for inspecting underlying documentation.


Sr. No. Key audit matters How the matters were addressed in our audit

2. Capitalization of Property, Plant

and Equipment

Refer to note 4.8 and 16 to the financial statements

The Company has made significant capital expenditure on expansion of its manufacturing facilities.

We identified capitalization of property, plant and equipment as a key audit matter because there is a risk that amounts being capitalized may not meet the capitalization criteria with related implications on depreciation charge for the year.

Our audit procedures to assess the capitalization of property, plant and equipment, amongst other, included the following:

· u n d e r s t a n d i n g t h e d e s i g n a n d implementation of management controls over capitalization and performing tests of control over authorization of capital expenditure and accuracy of its recording in the system;

· testing, on a sample basis, the costs incurred on projects with supporting documentation and contracts;

· assessing the nature of costs incurred for the capital projects through testing, on sample basis, of amounts recorded and considering whether the expenditure meets the criteria for capitalization as per the applicable accounting standards; and

· inspecting supporting documents for the date of capitalization when project was ready for its intended use to assess whether depreciation commenced and further capitalization of costs ceased from that date and assessing the useful life assigned by management including testing the calculation of related

Information Other than the Financial Statements and Auditor's Report Thereon

Management is responsible for the other information. Other information comprises the information included in the annual report for the year ended 30 June 2018, but does not include the financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

21


Responsibilities of Management and Board of Directors for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the accounting and reporting standards as applicable in Pakistan and the requirements of Companies Act, 2017(XIX of 2017) and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Board of directors are responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs as applicable in Pakistan will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs as applicable in Pakistan, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

· Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

· Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.

· Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

· Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.

· Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

22


We communicate with the board of directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the board of directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the board of directors, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

Based on our audit, we further report that in our opinion:

a) proper books of account have been kept by the Company as required by the Companies Act, 2017 (XIX of 2017);b) the statement of financial position, the statement of profit or loss, the statement of other comprehensive income, the statement of changes in equity and the statement of cash flows together with the notes thereon have been drawn up in conformity with the Companies Act, 2017 (XIX of 2017) and are in agreement with the books of account and returns;c) investments made, expenditure incurred and guarantees extended during the year were for the purpose of the Company's business; andd) zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was deducted by the Company and deposited in the Central Zakat Fund established under section 7 of that Ordinance. The engagement partner on the audit resulting in this independent auditor's report is M. Rehan Chughtai.

KPMG Taseer Hadi & Co.Chartered Accountants (M. Rehan Chughtai) Lahore, October 01, 2018

23

8,737,377,180 8,490,659,949 8,643,625,282

2018 2017 2016 2018 2017 2016Note Rupees Rupees Rupees Note Rupees Rupees Rupees

(Restated) (Restated) (Restated) (Restated)EQUITY AND LIABILITIES ASSETS

Share capital and reserves Non-current assets

Authorized share capital Property, plant and equipment 16 5,463,111,500 4,916,952,801 4,864,745,021 150,000,000 (2017: 100,000,000) ordinary Intangibles 17 2,437,001 3,829,574 5,222,147

shares of Rs. 10 each 5.1 1,500,000,000

1,000,000,000 1,000,000,000 Long term deposits 18 39,282,268 37,660,233 66,771,431

Issued, subscribed and paid-up capital 5.2 734,580,000

734,580,000 734,580,000Share premium 6 410,116,932

410,116,932 410,116,932Equity portion of shareholders' loan - net of tax - - 76,048,284Unappropriated profit 3,361,590,726 2,569,318,501 1,961,364,217 Current assetsSurplus on revaluation of freehold land 7 766,482,138 766,482,138 766,482,138

5,272,769,796 4,480,497,571 3,948,591,571 Stores and spare parts 19 765,306,156 733,317,189 618,537,598Stock in trade 20 1,245,881,277 1,425,994,416 1,492,207,643Trade debts - considered good 21 657,870,000 675,717,625 852,939,050Non current liabilities

22 308,659,879 475,690,271 479,994,107Cash and bank balances 23 254,829,099 221,497,840 263,208,285

Long term finances - secured 8 590,620,311

336,014,044 932,390,112

3,232,546,411 3,532,217,341 3,706,886,683Liabilities against assets subject to finance lease 9 1,238,793

3,707,386 15,288,080Long term deposits -

- 252,415,023Deferred taxation 10 410,813,723

466,003,181 164,221,2241,002,672,827

805,724,611 1,364,314,439Current liabilities

Trade and other payables 11 1,203,328,327

891,279,835 691,422,449Unclaimed dividend 5,370,450

4,145,933 15,591,131Accrued mark-up 12 30,839,016

27,534,642

72,080,535Current portion of long term liabilities 13 127,474,663

127,216,249

100,748,252Short term borrowings - secured 14 1,094,922,101

2,154,261,108 2,450,876,9052,461,934,557

3,204,437,767 3,330,719,272

8,737,377,180

8,490,659,949 8,643,625,282

Contingencies and commitments 15

The annexed notes from 1 to 43 form an integral part of these financial statements.

Advances, deposits, prepayments and other receivables

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2018

October 01, 2018 Lahore

MANSOOR IRFANICHAIRMAN MANAGING DIRECTOR / CEO

OMER BAIGCHIEF FINANCIAL OFFICER

WAQAR ULLAH

5,504,830,769 4,958,442,608 4,936,738,599

TGTARIQ G

LASS IND

USTRIES LTD

.

24


25

STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED 30 JUNE 2018




WAQAR ULLAH

2018 2017Note Rupees Rupees

Sales - net 24 12,301,807,970 9,902,563,681 Cost of sales 25 (9,977,838,443) (7,884,607,449)

Gross profit 2,323,969,527 2,017,956,232

Administrative expenses 26 (212,612,830) (176,666,214)

Selling and distribution expenses 27 (442,597,841)

(348,803,820)

Other operating income 28 14,518,483

23,997,515

Other operating expenses 29 (104,760,520)

(82,330,046)

(745,452,708)

(583,802,565)

Operating profit 1,578,516,819

1,434,153,667

Finance cost 30 (153,463,320)

(249,067,150)

Profit before taxation 1,425,053,499

1,185,086,517

Taxation 31 (327,930,564)

(425,396,079)

Profit after taxation 1,097,122,935

759,690,438

Earnings per share - basic and diluted 32 14.94

10.34



26

STATEMENT OF OTHER COMPREHENSIVE INCOMEFOR THE YEAR ENDED 30 JUNE 2018

2018 2017Rupees Rupees

Profit after taxation 1,097,122,935 759,690,438

Other comprehensive income for the year - -

Total comprehensive income for the year 1,097,122,935 759,690,438





WAQAR ULLAH


27

CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2018


Cash flows from operating activities

Profit before taxation 1,425,053,499 1,185,086,517 Adjustments for:

Depreciation 16.1 510,967,885 518,585,629 Amortization of intangibles 17.1 1,392,574

1,392,573 Gain on disposal of property, plant and equipment 28 (8,746,806)

(15,208,865)

Liabilities no longer payable written back 28 -

(5,863,723) Finance cost 30 153,463,320

249,067,150

Provision for Workers' Welfare Fund 29 28,269,819

18,959,218 Provision for Workers' Profit Participation Fund 29 76,490,701

63,370,828

761,837,493

830,302,810 Operating profit before working capital changes 2,186,890,992

2,015,389,327

Changes in :

Stores and spare parts (31,988,967)

(114,779,591)

Advances, deposits, prepayments and other receivables (39,667,114)

(58,489,037)

Stock in trade 180,113,139

66,213,227

Trade debts - considered good 17,847,625

177,221,425

Trade and other payables 285,464,665

(97,711,832)

411,769,348

(27,545,808)

Cash generated from operating activities 2,598,660,340

1,987,843,519

Payments to Workers' Profit Participation Fund 11.2 (67,643,842)

(35,585,142)

Payments to Workers' Welfare Fund 11.3 (19,732,221)

-

Finance cost paid (140,682,852)

(221,183,274)

Income tax paid (176,422,516)

(48,225,052)

(404,481,431)

(304,993,468)

Net cash generated from operating activities 2,194,178,909

1,682,850,051

Cash flows from investing activitiesFixed capital expenditure (1,060,424,781)

(577,328,544)

Proceeds from disposal of property, plant and equipment 16.1.3 12,045,003

25,505,000

Long term deposits (1,622,035)

29,111,198

Net cash used in investing activities (1,050,001,813)

(522,712,346)

Cash flows from financing activities

Net receipts from long term finances - secured 266,829,542

36,290,769

Repayments of long term finances - unsecured -

(51,050,184)

Liabilities against assets subject to finance lease (14,710,179)

(13,873,697)

Repayments of short term borrowings - net (1,359,506,982)

(96,236,081)

Dividend paid (303,626,193)

(209,781,948)

Net cash used in financing activities 39 (1,411,013,812)

(334,651,141)

Net (decrease) / increase in cash and cash equivalents (266,836,716)

825,486,564

Cash and cash equivalents at beginning of year (355,776,787) (1,181,263,351)Cash and cash equivalents at end of year 23.2 (622,613,503) (355,776,787)





WAQAR ULLAH


28

STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 30 JUNE 2018

Revenue reserveEquity portion

of shareholders'loan - net of tax

Balance as at 30 June 2016 - as previouslyreported 734,580,000 410,116,932 76,048,284 - 486,165,216 1,961,364,217 3,182,109,433

Effect of restatement - note 4.1 - - - 766,482,138 766,482,138 - 766,482,138 Balance as at 30 June 2016 - restated 734,580,000 410,116,932 76,048,284 766,482,138 1,252,647,354 1,961,364,217 3,948,591,571

Total comprehensive incomeProfit after tax for the year - - - - - 759,690,438 759,690,438 Other comprehensive income for the year - - - - - - - Total comprehensive income - - - - - 759,690,438 759,690,438

Transactions with the owners of the Company

Transferred on unwinding - net of tax - - (46,600,596) - (46,600,596) 46,600,596 - Final dividend for the year ended 30 June 2016 at the rate of Rs 2.7 (27%) per ordinary share - - - - - (198,336,750) (198,336,750) Adjustment due to repayment - net of tax - - (29,447,688) - (29,447,688) - (29,447,688)

Balance as at 30 June 2017 - restated 734,580,000 410,116,932 - 766,482,138 1,176,599,070 2,569,318,501 4,480,497,571

Balance as at 30 June 2017 - as previously reported 734,580,000 410,116,932 - - 410,116,932 2,569,318,501 3,714,015,433

Effect of restatement - note 4.1 - - - 766,482,138 766,482,138 - 766,482,138 Balance as at 30 June 2017 - restated 734,580,000 410,116,932 - 766,482,138 1,176,599,070 2,569,318,501 4,480,497,571

Total comprehensive incomeProfit after tax for the year - - - - - 1,097,122,935 1,097,122,935 Other comprehensive income for the year - - - - - - -

Total comprehensive income - - - - - 1,097,122,935 1,097,122,935

Transactions with the owners of the CompanyFinal dividend for the year ended 30 June 2017 at the rate of Rs 4.15 (41.5%) per ordinary share - - - - - (304,850,710) (304,850,710)

Balance as at 30 June 2018 734,580,000 410,116,932 - 766,482,138 1,176,599,070 3,361,590,726 5,272,769,796


--------------------------------------------------Rupees--------------------------------------------------

Capital reserveSurplus on

revaluation of land

Share capital Unappropriated profit

Total equitySub-total Share premium




WAQAR ULLAH


29

1 Reporting entity

Tariq Glass Industries Limited (“the Company”) was incorporated in Pakistan in 1978 and converted into a Public Limited Company in the year 1980. The Company's shares are listed on Pakistan Stock Exchange. The Company is principally engaged in the manufacture and sale of glass containers, opal glass, tableware and float glass. The registered office of the Company is situated at 128-J, Model Town, Lahore. The production facilities of the Company are located at Kot Saleem, Sheikhupura location.

2 Summary of significant events and transactions in the current reporting period

The Company's financial position and performance were particularly affected by the following events and transactions during the reporting period:

- The Company has incurred capital expenditure as part of its capacity enhancement of production facilities. In this respect, the Company has obtained additional long term loan of Rs. 379.32 million during the year as explained in note 8 to these financial statements. Further, during the year the Company has purchased land measuring 162.69 kanals and given advance for purchase of land measuring 14 kanals for further expansion of manufacturing facilities in future. This is reflected in note 16 to these financial statements.

- The accounting policy for surplus on revaluation of land changed during the year as explained in note 4.1 to these financial statements. Consequently, the amount of surplus on revaluation of land reported outside the equity in the prior years has been reclassified to equity.

- As explained in note 3.2.1, due to the first time application of financial reporting requirements under the Companies Act, 2017, including disclosure and presentation requirements of the fourth schedule of the Companies Act, 2017, some of the amounts reported for the previous period have been reclassified.

- For a detailed discussion about the Company's performance, please refer to the Director's report accompanied with the annual report of the Company for the year ended 30 June 2018.

3 Basis of accounting

3.1 Statement of compliance

These financial statements have been prepared in accordance with the accounting and reporting standards as applicable in Pakistan. The accounting and reporting standards applicable in Pakistan comprise of:

- International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) as notified under the Companies Act 2017; and

- Islamic Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountants of Pakistan as notified under the Companies Act, 2017; and

- Provision of and directives issued under the Companies Act, 2017.

Where provisions of and directives issued under the Companies Act, 2017 differ from the IFRS, the provisions of and directives issued under the Companies Act, 2017 have been followed.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018


30

3.2 New Companies Act, 2017 and new and revised approved accounting standards, interpretations and amendments thereto

3.2.1 Companies Act, 2017 has become applicable on financial statements of the Companies whose financial year / interim period closes on or after 01 January 2018. The new Act specified certain additional disclosures to be included in the financial statements. Accordingly, the Company has presented the required disclosures in these financial statements and represented certain comparatives. However there was no change in the reported amounts of statement of profit or loss and other comprehensive income or the amounts presented in the statement of financial position due to these re-presentations. Significant reclassifications / representations are as follows: - Unclaimed dividend which was previously classified under trade and other payables have been presented separately in the statement of financial position.

3.2.2 The following International Financial Reporting Standards (IFRS Standards) as notified under the Companies Act, 2017 and the amendments and interpretations thereto will be effective for accounting periods beginning on or after 01 July 2018:

- Classification and Measurement of Share-based Payment Transactions - amendments to IFRS 2 clarify the accounting for certain types of arrangements and are effective for annual periods beginning on or after 1 January 2018. The amendments cover three accounting areas (a) measurement of cash-settled share-based payments; (b) classification of sha re -based paymen ts se t t l ed ne t o f t ax w i t hho ld i ngs ; and ( c ) accounting for a modification of a share-based payment from cash-settled to equity- settled. The new requirements could affect the classif ication and/or measurement of these arrangements and potentially the timing and amount of expense recognized for new and outstanding awards. The amendments are not likely to have an impact on the Company’s financial statements.

- Transfers of Investment Property (Amendments to IAS 40 ‘Investment Property’, effective for annual periods beginning on or after 1 January 2018) clarifies that an entity shall transfer a property to, or from, investment property when, and only when there is a change in use. A change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. In isolation, a change in management's intentions for the use of a property does not provide evidence of a change in use. The amendments are not likely to have an impact on the Company’s financial statements.

- Annual Improvements to IFRSs 2014-2016 Cycle [Amendments to IAS 28 ‘Investments in Associates and Joint Ventures’] (effective for annual periods beginning on or after 1 January 2018) clarifies that a venture capital organization and other similar entities may elect to measure investments in associates and joint ventures at fair value through profit or loss, for each associate or joint venture separately at the time of initial recognition of investment. Furthermore, similar election is available to non-investment entity that has an interest in an associate or joint venture that is an investment entity, when applying the equity method, to retain the fair value measurement applied by that investment entity associate or joint venture to the investment entity associate's or joint venture's interests in subsidiaries. This election is made separately for each investment entity associate or joint venture. The amendments are not likely to have an impact on the Company’s financial statements.

- IFRIC 22 ‘Foreign Currency Transactions and Advance Consideration’ (effective for annual periods beginning on or after 1 January 2018) clarifies which date should be used for translation when a foreign currency transaction involves payment or receipt in advance of the item it relates to. The related item is translated using the exchange rate on the date the


31

- advance foreign currency is received or paid and the prepayment or deferred income is recognized. The date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income (or part of it) would remain the date on which receipt of payment from advance consideration was recognized. If there are multiple payments or receipts in advance, the entity shall determine a date of the transaction for each payment or receipt of advance consideration. The application of interpretation is not likely to have an impact on the Company’s financial statements.

- IFRIC 23 ‘Uncertainty over Income Tax Treatments’ (effective for annual periods beginning on or after 1 January 2019) clarifies the accounting for income tax when there is uncertainty over income tax treatments under IAS 12. The interpretation requires the uncertainty over tax treatment be reflected in the measurement of current and deferred tax. The application of interpretation is not likely to have an impact on the Company’s financial statements.

- IFRS 15 ‘Revenue from contracts with customers’ (effective for annual periods beginning on or after 1 July 2018). IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognized. It replaces existing revenue recognition guidance, including IAS 18 ‘Revenue’, IAS 11 ‘Construction Contracts’ and IFRIC 13 ‘Customer Loyalty Programmes’. The Company is currently in the process of analyzing the potential impact of changes required in revenue recognition policies on adoption of the standard.

- IFRS 9 ‘Financial Instruments’ and amendment – Prepayment Features with Negative Compensation (effective for annual periods beginning on or after 1 July 2018 and 1 January 2019 respectively). IFRS 9 replaces the existing guidance in IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 includes revised guidance on the classification and measurement of financial instruments, a new expected credit loss model for calculating impairment on financial assets, and new general hedge accounting requirements. It also carries forward the guidance on recognition and derecognition of financial instruments from IAS 39. The Company is currently in the process of analyzing the potential impact of changes required in classification and measurement of financial instruments and the impact of expected loss model on adoption of the standard.

- IFRS 16 ‘Leases’ (effective for annual period beginning on or after 1 January 2019). IFRS 16 replaces existing leasing guidance, including IAS 17 ‘Leases’, IFRIC 4 ‘Determining whether an Arrangement contains a Lease’, SIC-15 ‘Operating Leases- Incentives’ and SIC-27 ‘Evaluating the Substance of Transactions Involving the Legal Form of a Lease’. IFRS 16 introduces a single, on-balance sheet lease accounting model for lessees. A lessee recognizes a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. There are recognition exemptions for short-term leases and leases of low-value items. Lessor accounting remains similar to the current standard i.e. lessors continue to classify leases as finance or operating leases. The Company is currently in the process of analyzing the potential impact of changes required in classification and measurement of leases.

- Amendment to IAS 28 ‘Investments in Associates and Joint Ventures’ - Long Term Interests in Associates and Joint Ventures (effective for annual period beginning on or after 1 January 2019). The amendment will affect companies that finance such entities with preference shares or with loans for which repayment is not expected in the foreseeable future (referred to as long-term interests or ‘LTI’). The amendment and accompanying example state that LTI are in the scope of both IFRS 9 and IAS 28 and explain the annual sequence in which both standards are to be applied. The amendments are not likely to have an impact on the Company’s financial statements.

- Amendments to IAS 19 ‘Employee Benefits’- Plan Amendment, Curtailment or Settlement (effective for annual periods beginning on or after 1 January 2019). The amendments clarify that on amendment, curtailment or settlement of a defined benefit plan, a company now uses updated actuarial assumptions to determine its current service cost and net interest for the period; and the effect of the asset ceiling is disregarded when calculating the gain or loss on any settlement of the plan and is dealt with separately in other comprehensive income. The application of amendments is not likely to have an impact on the Company’s financial statements.

Annual Improvements to IFRS Standards 2015–2017 Cycle - the improvements address amendments to following approved accounting standards:


32

- IFRS 3 Business Combinations and IFRS 11 Joint Arrangement - the amendment aims to clarify the accounting treatment when a company increases its interest in a joint operation that meets the definition of a business.

- IAS 12 Income Taxes - the amendment clarifies that all income tax consequences of dividends (including payments on financial instruments classified as equity) are recognized consistently with the transaction that generates the distributable profits.

- IAS 23 Borrowing Costs - the amendment clarifies that a company treats as part of general borrowings any borrowing originally made to develop an asset when the asset is ready for its intended use or sale.

- IFRIC 23 ‘Uncertainty over Income Tax Treatments’ (effective for annual periods beginning on or after 1 January 2019) clarifies the accounting for income tax when there is uncertainty over income tax treatments under IAS 12. The interpretation requires the uncertainty over tax treatment be reflected in the measurement of current and deferred tax.

The above amendments are effective from annual period beginning on or after 1 January 2019 and are not likely to have an impact on the Company’s financial statements.

3.3 Basis of measurement

These financial statements have been prepared under the historical cost convention except for land, which is measured at revalued amount and financial instruments which are carried at fair value.

3.4 Functional and presentation currency

These financial statements are presented in Pakistani Rupee ("Rs.") which is the Company’s functional currency. All financial information presented in Rupees has been rounded off to the nearest rupee, unless otherwise stated.

3.5 Use of estimates and judgments

The preparation of these financial statements in conformity with approved accounting standards requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under circumstances, and the results of which form the basis for making judgment about carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which estimates are revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The areas where assumptions and estimates are significant to the Company's financial statements or where judgment was exercised in application of accounting policies are as follows:

Property, plant and equipment

The management of the Company reassesses useful lives and residual value for each item of property, plant and equipment annually by considering expected pattern of economic benefits that the Company expects to derive from that item and the maximum period up to which such benefits are expected to be available. Any change in estimates in future years might affect the carrying


33

amounts of respective items of property, plant and equipment with a corresponding effect on the depreciation charge and impairment.

Revaluation of property, plant and equipment

Revaluation of property, plant and equipment is carried out by independent professional valuers. Revalued amounts of non-depreciable items are determined by reference to local market values and that of depreciable items are determined by reference to present depreciated replacement values. The Company uses revaluation model only for its non-depreciable items of property, plant and equipment.

The frequency of revaluations depends upon the changes in fair values of the items of property, plant and equipment being revalued. When the fair value of a revalued asset differs materially from its carrying amount, a further revaluation is required. Such frequent revaluations are unnecessary for items of property, plant and equipment with only insignificant changes in fair value. Instead, it may be necessary to revalue the item only every three to five years. Stores and spare parts The Company reviews the stores and spare parts for possible impairment on an annual basis. Any change in estimates in future years might affect the carrying amounts of respective items of stores and spares with a corresponding effect on provision.

Stock in trade The Company reviews the carrying amount of stock-in-trade on a regular basis. Carrying amount of stock-in-trade is adjusted where the net realizable value is below the cost. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

Impairment

The management of the Company reviews carrying amounts of its assets including receivables and advances and cash generating units for possible impairment and makes formal estimates of recoverable amount if there is any such indication.

Provision against trade debts, advances and other receivables

The Company reviews the recoverability of its trade debts, advances and other receivables at each reporting date to assess amount of bad debts and provision required there against on annual basis. Provisions and Contingencies

The Company reviews the status of all pending litigations and claims against the Company. Based on its judgment and the advice of the legal advisors for the estimated financial outcome, appropriate disclosure or provision is made. The actual outcome of these litigations and claims can have an effect on the carrying amounts of the liabilities recognized at the balance sheet date. Taxation

The Company takes into account the current income tax law and decisions taken by the taxation authorities. Instances where the Company's views differ from the views taken by the income tax department at the assessment stage and where the Company considers that its view on items of material nature is in accordance with law, the amounts are shown as contingent liabilities.

The Company also regularly reviews the trend of proportion of incomes between Presumptive Tax Regime and Normal Tax Regime and the change in proportions, if significant, is accounted for in the year of change.

4 Significant accounting policies

The significant accounting policies set out below have been consistently applied to all periods presented in these financial statements, except as disclosed in note 4.1.


34

4.1 Changes in accounting policies

Upto 30 June 2017, surplus on revaluation of land was being measured under the repealed Companies Ordinance, 1984. The surplus arisen on the revaluation is credited to the surplus on revaluation of land account. As Companies Act, 2017 has become applicable and section 235 of the repealed Companies Ordinance, 1984 relating to treatment of surplus arising on revaluation of fixed assets has not been carried forward in the Companies Act, 2017. Accordingly the management has changed the accounting policy to bring accounting of revaluation surplus on land in accordance with IAS 16 "Property, plant and equipment". The effect of this change in accounting policy, which is applied with retrospective effect, has resulted in reclassification of surplus on revaluation of land to equity which was previously being presented outside the equity.

Pursuant to the requirements of IAS 7 "Cash Flow Statement" a disclosure of reconciliation of movements of liabilities to cash flows arising from financing activities has been given in note 39 to the financial statements. This change does not have any impact on the figures reported in the financial statements.

4.2 Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognized as a deduction from equity, net of any tax effects. 4.3 Leases

Leases are classified as finance lease whenever terms of the lease transfer substantially all risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Finance leases

Finance lease are stated at amounts equal to the fair value or, if lower, the present value of the minimum lease payments. The minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability. Assets acquired under finance leases are depreciated in accordance with the Company’s depreciation policy on property and equipment. The finance cost is charged to profit and loss account.

The related rental obligations, net of finance costs, are included in liabilities against assets subject to finance lease. The liabilities are classified as current and non-current depending upon the timing of the payment.

Operating lease / Ijarah contracts Leases including Ijarah financing, where a significant portion of the risks and rewards of ownership are retained by the lessor, are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit on a straight-line basis over the lease / ijarah term unless another systematic basis is representative of the time pattern of the Company’s benefit.

4.4 Taxation

Current

Current tax is the amount of tax payable on taxable income for the year, using tax rates enacted or substantively enacted by the reporting date, and any adjustment to the tax payable in respect of previous years. Provision for current tax is based on current rates of taxation in Pakistan after taking into account tax credits, rebates and exemptions available, if any. The amount of unpaid income tax in respect of the current or prior periods is recognized as a liability. Any excess paid over what is due in respect of the current or prior periods is recognized as an asset.

Deferred

Deferred tax is recognized using the balance sheet liability method on all temporary differences between the carrying amounts of assets and liabilities for the financial reporting purposes and the amounts used for taxation purposes.


35

Deferred tax asset is recognized for all deductible temporary differences only to the extent that it is probable that future taxable profits will be available against which the asset may be utilized. Deferred tax asset is reduced to the extent that it is no longer probable that the related tax benefit will be realized. Deferred tax liabilities are recognized for all taxable temporary differences.

In this regard, the effects on deferred taxation of the portion of income that is subject to final tax regime is also considered in accordance with the treatment prescribed by the Institute of Chartered Accountants of Pakistan.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on the tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is charged or credited in the income statement, except in the case of items credited or charged to comprehensive income or equity, in which case it is included in comprehensive income or equity.

4.5 Trade and other payables

Liabilities for trade and other amounts payable are carried at cost which is the fair value of the consideration to be paid in future for goods or services received.

4.6 Provisions

A provision is recognized in the balance sheet when the Company has a legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation. The amount recognized as a provision reflects the best estimate of the expenditure required to settle the present obligation at the end of the reporting period. However, provisions are reviewed at each balance sheet date and adjusted to reflect current best estimates.

4.7 Employee benefits

Salaries, wages and benefits are accrued in the period in which the associated services are rendered by employees of the Company and measured on an undiscounted basis. The accounting policy for employee retirement benefits is described below:

Post employment benefits - Defined contribution plan

The Company operates an approved defined contributory provident fund for all its eligible employees. Equal contributions are made monthly both by the Company and the employees in accordance with the rules of the scheme at the rate of 10% of basic salary.

Obligations for contributions to defined contribution plans are expensed as the related service is provided. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in future payments is available.

4.8 Property, plant and equipment Tangible assets

Owned

Items of property, plant and equipment other than freehold land are stated at cost less accumulated depreciation and impairment losses, if any. Freehold land is stated at revalued amount being the fair value at the date of revaluation less subsequent impairment losses, if any. Cost comprises purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates and includes other costs directly attributable to the


36

acquisition or construction including expenditures on material, labour and overheads directly relating to construction, erection and installation of items of property, plant and equipment. Surplus on revaluation of freehold land is recognized in equity. On disposal of particular asset related revaluation surplus will be transferred to retained earning.

Capital work-in-progress is stated at cost less identified impairment losses, if any. All expenditure connected with specific assets incurred during installation and construction period are carried under capital work-in-progress. These are transferred to specific assets as and when these are available for use

All other repairs and maintenance are charged to income during the period in which these are incurred.

Depreciation charge is based on the reducing balance method, except for furnace which is being depreciated using the straight line method, so as to write off the historical cost of an asset over its estimated useful life at rates mentioned in note 16 after taking into account their residual values. Depreciation on additions is charged from the month in which these are capitalized, while no depreciation is charged in the month in which an asset is disposed off.

An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Gains and losses on sale of an item of property, plant and equipment are determined by comparing the proceeds from sale with the carrying amount of property, plant and equipment, and are recognized in profit or loss account.

Leased

Assets held under finance lease arrangements are initially recorded at the lower of present value of minimum lease payments under the lease agreements and the fair value of leased assets. Depreciation on leased assets is charged by applying reducing balance method at the rates used for similar owned assets, so as to depreciate the assets over their estimated useful life in view of certainty of ownership of assets at the end of the lease term.

4.9 Intangibles

Intangible asset is stated at cost less accumulated amortization for finite intangible asset and any identified impairment loss. The estimated useful life and amortization method is reviewed at the end of each annual reporting period, with effect of any changes in estimate being accounted for on a prospective basis.

Finite intangible assets are amortized using straight-line method over a period of five years. Amortization on additions to intangible assets is charged from the month in which an asset is put to use and on disposal up to the month of disposal. 4.10 Stores and spare parts

These are stated at lower of cost and net realizable value. Cost is determined using the weighted average method. Items in transit are valued at cost comprising invoice value plus other charges paid thereon.

4.11 Stock in trade

Cost of inventories is determined and measured on the following basis:

Raw material at weighted average costWork in process at weighted average manufacturing costFinished goods at weighted average manufacturing costPacking material at weighted average cost


37

Inventories are valued at the lower of cost or estimated net realizable value. Cost comprises all costs of purchase and other costs incurred in bringing the inventories to their present location and condition. Net realizable value signifies the estimated selling price in the ordinary course of business less net estimated costs of completion and selling expenses.

Stock-in-transit is valued at cost comprising invoice value plus other charges incurred thereon.

4.12 Trade debts

Trade debts are carried at original invoice amount less an estimate made for doubtful debts based on review of outstanding amounts at the year end. Bad debts are written off when identified.

4.13 Cash and cash equivalents

For the purpose of cash flow statement, cash and cash equivalents comprise cash in hand and bank balances and running finance which are stated in the balance sheet at cost.

4.14 Financial instruments

Financial assets and liabilities are recognized when the Company becomes a party to contractual provisions of the instrument and de-recognized when the Company looses control of contractual rights that comprise the financial asset and in case of financial liability when the obligation specified in the contract is discharged, cancelled or expired. Any gain or loss on derecognition of financial assets and liabilities are included in profit and loss account for the year.

4.14.1 Non-derivative financial assets

The Company initially recognizes loans and receivables on the date that they are originated. All other financial assets (including assets designated as at fair value through profit or loss) are recognized initially on the trade date, which is the date that the Company becomes a party to the contractual provisions of the instrument.

The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in such transferred financial assets that is created or retained by the Company is recognized as a separate asset or liability.

The Company classifies non-derivative financial assets into the following categories: financial assets at fair value through profit or loss, held-to-maturity financial assets, loans and receivables and available-for-sale financial assets

Financial assets at fair value through profit or loss

A financial asset is classified as at fair value through profit or loss if it is classified as held-for trading or is designated as such on initial recognition. Financial assets are designated as at fair value through profit or loss if the Company manages such investments and makes purchase and sale decisions based on their fair value in accordance with the Company’s documented risk management or investment strategy. Attributable transaction costs are recognized in profit or loss as incurred. Financial assets at fair value through profit or loss are measured at fair value and changes therein, are recognized in profit or loss. However, the Company has no such financial assets at the year end.

Held-to-maturity financial assets

If the Company has the positive intent and ability to hold debt securities to maturity, then such financial assets are classified as held-to-maturity. Held-to-maturity financial assets are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, held-to-maturity financial assets are measured at amortized cost using the


38

Loans and receivables

Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortized cost using the effective interest method, less any impairment losses.

Loans and receivables comprise of long term deposits, trade debts, short term deposits, other receivables and cash and bank balances.

Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale or are not classified in any of the above categories of financial assets. Available- for-sale financial assets are recognized initially at fair value plus any directly attributable transaction costs.

Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses and foreign currency differences on available-for-sale debt instruments, are recognized in other comprehensive income and presented in the fair value reserve in equity. When an investment is derecognized, the gain or loss accumulated in equity is reclassified to profit or loss. However, the Company has no such financial assets at the year end.

4.14.2 Non-derivative financial liabilities

The Company initially recognizes debt securities issued and subordinated liabilities on the date that they are originated. All other financial liabilities are recognized initially on the trade date, which is the date that the Company becomes a party to the contractual provisions of the instrument.

The Company derecognizes a financial liability when its contractual obligations are discharged, cancelled or expire.

The Company classifies financial liabilities recognized initially at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortized cost using the effective interest method.

Financial liabilities comprise of long term finances, liabilities against assets subject to finance lease, current portion of long term liabilities, trade and other payables, unclaimed dividend, accrued mark-up and short term borrowings.

4.15 Impairment

Financial assets

A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of the asset.

An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate. Impairment loss in respect of a financial asset measured at fair value is determined by reference to that fair value. All impairment losses are recognized in profit and loss account. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized. An impairment loss is reversed only to the extent that the financial asset’s carrying amount after the reversal does not exceed the carrying amount that would have been determined, net of amortization, if no impairment loss had been recognized.

Impairment losses on available for sale financial assets are recognized by reclassifying the losses accumulated in the fair value reserve to profit or loss. The amount reclassified is the difference between the acquisition cost (net of any principal repayment and amortization) and the current fair value, less any impairment loss previously recognized in profit or loss. If the fair value of an

impaired available for sale debt security subsequently increases and the increase can be related objectively to an event occurring after the impairment loss was recognized, then the impairment loss is reversed through profit and loss; otherwise it is reversed through other comprehensive income.

Non-financial assets

The carrying amount of the Company’s non-financial assets, other than inventories and deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. The recoverable amount of an asset or cash generating unit is the greater of its value in use and its fair value less cost to sell. In assessing value in use, the estimated future cash flows are discounted to their present values using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or cash generating unit.

An impairment loss is recognized if the carrying amount of the assets or its cash generating unit exceeds its estimated recoverable amount. Impairment losses are recognized in profit and loss account. Impairment losses recognized in respect of cash generating units are allocated to reduce the carrying amounts of the assets in a unit on a pro rata basis. Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to that extent that the asset’s carrying amount after the reversal does not exceed the carrying amount that would have been determined, net of depreciation and amortization, if no impairment loss had been recognized.

4.16 Offsetting of financial assets and financial liabilities

A financial asset and a financial liability is offset and the net amount is reported in the balance sheet if the Company has a legally enforceable right to offset the recognized amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.

4.17 Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable, net of returns allowances, trade discounts and rebates, and represents amounts received or receivable for goods and services provided. Revenue is recognized when it is probable that the economic benefits associated with the transaction will flow to the Company, and the amount of revenue and the associated costs incurred or to be incurred can be measured reliably.

- Revenue from sale of goods is recognized when risks and rewards incidental to the ownership of goods are transferred to the buyer;

- Dividend income is recognized when the Company's right to receive payment is established; and

- Interest income is recognized as and when accrued on effective interest method.

4.18 Borrowings cost

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use. All other borrowing costs are recognized in profit and loss account as incurred.

4.19 Contingent liabilities

A contingent liability is disclosed when:

- there is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company; or


39


40

- there is present obligation that arises from past events but it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability.

4.20 Foreign currency transactions and balances

Transactions in foreign currencies are translated to the respective functional currencies of the Company at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortized cost in the functional currency at the beginning of the year, adjusted for effective interest and payments during the year, and the amortized cost in foreign currency translated at the exchange rate at the end of the year.

Non-monetary assets and liabilities that are measured at fair value in a foreign currency are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items that are measured based on historical cost in a foreign currency are not translated.

Foreign currency differences arising on retranslation are generally recognized in profit and loss account.

4.21 Earnings per share

Basic earnings per share (EPS) is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year.

4.22 Dividend to ordinary shareholders

Dividend to ordinary shareholders is recognized as a deduction from accumulated profit in statement of changes in equity and as a liability in the Company’s financial statements in the year in which it is declared by the Company’s shareholders.

4.23 Mark-up bearing borrowings

Mark-up bearing borrowings are recognized initially at cost representing the fair value of consideration received less attributable transaction costs. Subsequent to initial recognition, mark- up bearing borrowings are stated at original cost less subsequent repayments, while the difference between the original recognized amounts (as reduced by periodic payments) and redemption value is recognized in the profit and loss account over the period of borrowings on an effective rate basis. The borrowing cost on qualifying asset is included in the cost of related asset.


41

5 Share capital

2018 2017 2018 20175.1 Authorized share capital (Number of shares) Rupees Rupees

Ordinary shares of Rs. 10 each 150,000,000

100,000,000

1,500,000,000

1,000,000,000

5.1.1

2018 2017 2018 20175.2 Issued, subscribed and paid-up capital (Number of shares) Rupees Rupees

67,750,000

67,750,000

677,500,000

677,500,000

1,550,000

1,550,000

15,500,000

15,500,000

4,158,000

4,158,000

41,580,000

41,580,000

73,458,000

73,458,000 734,580,000

734,580,000

2018 2017

5.2.1 Shares held by associated undertakings are as follows:Number of

sharesNumber of

shares

Omer Glass Industries Limited 7,733,760 7,733,760 M & M Glass (Private) Limited 928,844 -

8,662,604 7,733,760

5.2.2

6 Share premium

7 Surplus on revaluation of freehold land

2018 20178 Long term finances - secured Note Rupees Rupees

Markup bearing finances from conventional bank:

Bank of Punjab - Demand finance 1 8.1 -

37,500,000

Bank of Punjab - Demand finance 2 8.2 218,750,000

293,750,000

Bank of Punjab - Demand finance 3 8.3 296,870,311

117,540,769

Bank Alfalah Limited 8.4 200,000,000

-

Less: Transaction cost 8.5 -

(276,725)

715,620,311 448,514,044

Less: Current maturity 13 (125,000,000) (112,500,000)

590,620,311 336,014,044

This represents surplus arisen on revaluation of freehold land. The latest revaluation of freehold land was carried outby independent valuer, M/S Hamid Mukhtar & Co. (Private) Limited as at 11 February 2016. As discussed in note4.1 to these financial statements, the Companies Act, 2017 is applicable for financial year beginning on 1 July 2017.This has resulted in reclassification of surplus on revaluation of freehold land to equity. The revaluation of thefreehold land was based on inquiries from real estate agents and property dealers in near vicinity of the freeholdland.

Directors hold 16,762,411 (2017: 29,980,860) ordinary shares comprising 22.82% (2017: 40.81%) oftotal paid up share capital of the Company.

During the year, pursuant to the Board of Directors and Shareholders' approvals dated 27 July 2017 and 30August 2017 respectively, the Company has increased its authorized share capital to Rs. 1,500,000,000 (30June 2017: Rs 1,000,000,000).

Ordinary shares of Rs. 10/- each fullypaid in cash

Ordinary shares of Rs. 10/- eachissued as fully paid bonus shares

Ordinary shares of Rs. 10/- eachissued for consideration other than cash

This reserve can be utilized by the Company only for the purpose specified in section 81(2) of the Companies Act, 2017.


42

8.1 This represented demand finance facility availed from The Bank of Punjab for purchase of plant and machinery and to partially refinance the purchase of plant and machinery for the Company. The sanctioned limit of the facility was Rs. 300 million (2017: Rs. 300 million) and was secured by way of first joint pari passu charge over present and future fixed assets of the Company amounting to Rs. 566.67 million and ranking charge on all present and future fixed assets of the company amounting to Rs. 308.33 million (to be upgraded to first joint parri passu charge on fixed assets) and personal guarantee of sponsor director of the Company. The outstanding principal was fully repaid on 31 December 2017. This facility carried mark up at the rate of 3 months KIBOR plus 90 bps per annum (2017: 3 months KIBOR plus 90 bps per annum) payable on quarterly basis.

8.2 This represents demand finance facility availed from The Bank of Punjab to meet the capital expenditure requirements of the Company. The sanctioned limit of facility is Rs. 300 million (2017: Rs. 300 million) and is secured by way of combined security of first joint parri passu charge over present and future fixed assets of the Company amounting to Rs. 566.67 million and ranking charge on all present and future fixed assets of the company amounting to Rs. 308.33 million (to be upgraded to first joint parri passu charge on fixed assets) and personal guarantee of sponsor director of the Company. The outstanding principal is repayable in 35 equal monthly installments ending on 23 May 2021. This facility carries mark up at the rate of 3 months KIBOR plus 90 bps per annum (2017: 3 months KIBOR plus 90 bps per annum), payable on quarterly basis. In case, the Company is not regular in payment to bank, it shall not without prior written approval of the bank, pay any dividends or make any other capital distributions.

8.3 This represents demand finance facility availed from The Bank of Punjab for the purpose of financing new production line for manufacture of "Opal Glass Dinnerware". The sanctioned limit of facility is Rs. 300 million (2017: Rs. 300 million) and is secured by way of combined security of first joint parri passu charge over present and future fixed assets of the Company amounting to Rs. 566.67 million and ranking charge on all the present and future fixed assets of the Company amounting to Rs. 308.33 million (to be upgraded to first joint parri passu charge on fixed assets) and personal guarantee of sponsor director of the Company. The facility is repayable after last draw down date over a period of 4 years (including grace period of 1 year) in 36 equal monthly instalments ending on 06 June 2022. This facility carries mark up at the rate of 3 months KIBOR plus 90 bps per annum (2017: 3 months KIBOR plus 90 bps per annum) payable on quarterly basis.

8.4 This represents term finance facility availed during the year from Bank Alfalah Limited for the purpose of financing new production line for manufacture of "Opal Glass Dinnerware". The sanctioned limit of this long term loan amounting is Rs. 200 million (2017: Rs. 200 million) and is secured by way of ranking charge on fixed assets of the Company amounting to Rs. 266.67 million (to be upgraded to first joint pari passu charge on fixed assets) (2017: Rs. 266.67 million) and personal guarantee of sponsor director of the Company. The facility is repayable after first draw down date over a period of 4 years (including grace period of 1 year) in 12 equal quarterly installments ending on 14 July 2021. This facility carries mark up at the rate of 3 months KIBOR plus 85 bps per annum (2017: 3 months KIBOR plus 85 bps per annum) payable on quarterly basis.


43

2018 20179 Liabilities against assets subject Note Rupees Rupees

to finance lease

Present value of minimum lease payments 3,713,456 18,423,635 Less: Current portion 13 (2,474,663) (14,716,249)

1,238,793 3,707,386

Minimum Future Present valuelease finance of minimum

payments charge lease payments

Not later than one year 2,626,689 152,026 2,474,663 Later than one year and not later

than five years 1,256,911 18,118 1,238,793 3,883,600 170,144 3,713,456

Minimum Future Present valuelease finance of minimum

payments charge lease payments

Not later than one year 15,456,126 739,877 14,716,249 Later than one year and not later

than five years 3,863,892 156,506 3,707,386 19,320,018 896,383 18,423,635

Salient features of the leases are as follows:2018 2017

Discount factor 6.16% - 8.77% 5% - 8.62%

Period of lease 3 - 5 years 3 - 5 yearsSecurity deposits 5% - 10% 5% - 10%

The amount of future minimum lease payments along with their present value and the periodsduring which they will fall due are:

2018

- - - - - - - - - - - - - - - - Rupees - - - - - - - - - - - - - - - -

2017

- - - - - - - - - - - - - - - - Rupees - - - - - - - - - - - - - - - -

20188.5 Transaction cost Rupees

Balance as at 01 July 276,725 Amortized during the year (276,725) Balance as at 30 June -

2017Rupees

896,385 (619,660) 276,725

9.1

9.2

The Company has entered into various lease agreements under mark up arrangement withfinancial institutions for lease of machinery, air compressor and vehicles. The liabilitiesunder these arrangements are payable in monthly and quarterly installments. Interest ratesimplicit in the lease is used as discounting factor to determine the present value of minimumlease payments.Lease agreement carries purchase option at the end of lease period and the Companyintends to exercise its option to purchase the leased asset upon completion of the leaseterm. Residual value of the leased assets has already been paid at the inception of thelease in the form of security deposit. There are no financial restrictions imposed by lessor.


44

Opening Charge / Closingbalance (reversal) balance

10 Deferred taxation

Taxable temporary differenceAccelerated tax depreciation allowances 466,003,181 (55,189,458) 410,813,723

466,003,181 (55,189,458) 410,813,723

Opening Charge / Closingbalance (reversal) balance

Taxable temporary differenceAccelerated tax depreciation allowances 290,083,079 175,920,102 466,003,181 Equity portion of shareholders' loan 33,532,696 (33,532,696) -

Deductible temporary differenceUnused tax credits (159,394,551) 159,394,551 -

164,221,224 301,781,957 466,003,181

2018 201711 Trade and other payables Note Rupees Rupees

Trade creditors 361,361,795 298,996,879 Advances from customers 102,879,560 77,409,257 Accrued expenses 347,403,152 154,029,286 Provident fund payable 4,067,426 3,510,275 Security deposits 11.1 256,805,023 256,105,023 Payable to Workers' Profit Participation Fund 11.2 85,690,070 67,643,842 Payable to Workers' Welfare Fund 11.3 39,816,132 31,278,534 Withholding tax payable 5,305,169 2,306,739

1,203,328,327 891,279,835

11.1 Security deposits

2018

These represent amounts received from dealers and by virtue of contract can be utilized inthe Company’s business. These are repayable at the time of termination of dealerships oron demand.

- - - - - - - - - - - - - - - - Rupees - - - - - - - - - - - - - - - -

2017

- - - - - - - - - - - - - - - - Rupees - - - - - - - - - - - - - - - -

45



11.2 Payable to Workers' Profit Participation Fund

Balance as at 01 July 67,643,842

35,585,142 Provision for the year 29 76,490,701

63,370,828

Interest for the year 30 9,199,369

4,273,014 Paid during the year (67,643,842)

(35,585,142)

Balance as at 30 June 85,690,070

67,643,842

11.3 Payable to Workers' Welfare Fund

Balance as at 01 July 31,278,534

18,183,039 Provision for the year 29 28,269,819

18,959,218

Paid during the year (19,732,221)

(5,863,723) Balance as at 30 June 39,816,132

31,278,534

12 Accrued mark-up

Mark-up based borrowings from conventional banks Long term finances - secured 13,166,447 6,079,398 Short term borrowings - secured 15,572,089 16,885,828 Finance lease 41,212 143,944

Islamic mode of financing Short term borrowings - secured 2,059,268 4,425,472

30,839,016 27,534,642

13 Current portion of long term liabilities

Long term finances - secured 8 125,000,000 112,500,000

Liabilities against assets subject to finance lease 9 2,474,663

14,716,249

127,474,663

127,216,249

14 Short term borrowings - secured

Mark-up based borrowings from conventional banks

Short term running finance and cash finance - secured 14.1 994,411,266

980,823,139

Short term loan - secured 14.2 -

30,000,000

Finance against imported merchandise - secured 14.3 -

2,483,966

Loan from directors - unsecured 14.4 7,024,706

581,848,211

Islamic mode of financing

Short term islamic finance - secured 14.5 93,486,129

559,105,792

1,094,922,101

2,154,261,108

14.1 Short term running finance and cash finance - secured

14.2 Short term loan - secured

14.3 Finance against imported merchandise - secured

14.4 Loan from directors - unsecured

14.5 Short term islamic finance - secured

15 Contingencies and commitments

15.1 Contingencies

15.1.1 The commercial banks have issued following guarantees on behalf of the Company in favour of:

-

This represents short term loan facility availed from Standard Chartered Bank Limited tomeet working capital requirements with a cumulative sanctioned limit of Rs. 600 million(2017: Rs. 600 million). Mark up on this facility range from 3 months KIBOR plus 50 bps(2017: KIBOR 3 month plus 50 bps to 75 bps) per annum payable quarterly. These facilitiesare secured by way of charge of Rs. 800 million (2017: Rs. 800 million) on current assets ofthe Company. These facilities are also secured by personal guarantees of sponsor director ofthe Company and have various maturity dates up to 30 April 2019.

This represents unsecured interest free loan obtained from Managing Director of theCompany. This loan is repayable on demand.

Sui Northern Gas Pipelines Limited against supply of gas for furnace amounting to Rs.262 million (2017: Rs. 262 million)

This represents running finance and cash finance facilities availed from various commercialbanks to meet working capital requirements with a cumulative sanctioned limit of Rs. 3,775million (2017: Rs. 3,575 million). Mark up on these facilities range from 3 months KIBOR plus50 to 75 bps. (2017: 3 months KIBOR plus 50 to 100 bps) per annum payable quarterly.These facilities are secured by way of charge of Rs. 4,673.69 million (2017: 5,034 million) oncurrent assets of the Company. These facilities are also secured by personal guarantee ofsponsor director of the Company and have various maturity dates up to 31 January 2019.

This represents facility of finance against imported merchandise availed from variouscommercial banks having cumulative sanctioned limit of Rs. 60 million (2017: Rs. 220million). Mark up on the facility ranges from 3 months KIBOR plus 50 bps (2017: 3 monthsKIBOR plus 50 to 100 bps) per annum. The facility is secured against lien over importdocuments, pledge of imported goods and personal guarantees of sponsor director of theCompany. The facility has various maturity dates up to 31 December 2018.

This represents various islamic facilities availed from various islamic banks havingcumulative sanctioned limit of Rs. 1,200 million (2017: Rs. 1,100 million). Profit on thesefacilities ranges from respective KIBOR plus 50 to 70 bps (2017: Respective KIBOR plus 50to 100 bps) per annum. These facilities are secured by way of charge of Rs.1,156.34 million(2017: Rs. 1,157 million) on current assets of the Company and personal guarantees ofsponsor director of the Company. These facilities have various maturity dates up to 31 March2019.


46

-

15.1.2

15.1.3

15.1.4

15.1.5

15.1.6

The above guarantees are secured by way of charge on present and future fixed assets ofthe Company, counter guarantee of the Company and personal guarantees of sponsordirectors of the Company.

Sui Northern Gas Pipelines Limited against supply of gas for captive power amountingto Rs. 20.5 million (2017: Rs. 20.5 million).

An insurance company has issued an insurance guarantee amounting to Rs. 25 million(2017: Rs. 25 million) on behalf of the Company in favor of ICI Pakistan Limited againstpurchase of soda-ash from ICI Pakistan Limited. This guarantee is secured by way ofpromissory notes issued by the Company.

During the previous years the Company recorded provision against Gas InfrastructureDevelopment Cess (GIDC) for the period from July 2014 to April 2015 amounting to Rs. 123million. However pursuant to Gas Infrastructure and Development Cess Act, 2015 where itwas clarified that GIDC was not to be collected from industrial sector retrospectively, theCompany had reversed the recorded amount of provision of Rs. 123 million. The Company,along with various other companies challenged the legality and validity of levy and demandof GIDC in Honorable Lahore High Court which is pending adjudication.

The Deputy Commissioner of Inland Revenue (DCIR) raised income tax demand of Rs.59.26 million, relating to the tax year 2015. Being aggrieved, the Company filed an appealbefore CIR(A) which is pending adjudication. The Company on the basis of opinion of the taxadvisor is hopeful of favorable outcome of the case, accordingly no provision has beenrecorded in these financial statements.

During the year, the Deputy Commissioner of Inland Revenue (DCIR) raised income taxdemand of Rs. 147.12 million, relating to the tax year 2014. Being aggrieved, the Companyfiled an appeal before Commissioner Appeals - I. Further, the Company filed writ petition no.231682-18 before The Honorable Lahore High Court (LHC) and LHC has granted stayagainst recovery proceedings. The Company on the basis of opinion of the tax advisor ishopeful of favorable outcome of the case, accordingly no provision has been recorded inthese financial statements.

During the year, the Deputy Commissioner of Inland Revenue (DCIR) vide order number10/2017 dated 29 December 2017 raised sales tax demand of Rs. 248.59 million along witha penalty of Rs. 12.39 million relating to the tax year 2014. Being aggrieved, the Companyfiled an appeal before CIR(A) on the basis that demand was created on assumption andneeds to be annulled. The CIR(A) vide order no. 01 dated 29 July, 2018 has deleted thedemand of Rs. 31.39 million along with penalty of Rs. 1.57 million. The demand amounting toRs. 209.35 million along with penalty of Rs. 10.47 million was remanded back to DCIR andorder of CIR(A) was silent relating to the tax demand of Rs. 7.84 million along with fine of Rs.0.36 million. Being aggrieved, the Company filed second appeal before ATIR against theremand back of the case by CIR(A) against tax demand of Rs. 209.35 million along withpenalty of Rs. 10.47 million and also in process of filling rectification application before CIR(A)for adjudication relating to tax demand of Rs. 7.84 million along with fine of Rs. 0.36 million. TheCompany on the basis of opinion of the tax advisor is hopeful of favorable outcome of thecase, accordingly no provision has been recorded in these financial statements.


47

15.2 Commitments

-

-

-


Not later than one year 57,219,975 58,223,623 Later than one year but not later

than five years 33,335,872 74,797,767 90,555,847 133,021,390

16 Property, plant and equipment

Operating fixed assets 16.1 5,173,924,120 4,593,594,512 Capital work in progress 16.2 289,187,380 323,358,289

5,463,111,500 4,916,952,801

The amount of future ijarah rentals for ijarah financing and the period in which thesepayments will become due are as follows:

Letters of credit for capital expenditure amounting to Rs. 264.59 million (2017: Rs.204.03 million).

Letters of credit for other than capital expenditure amounting to Rs. 118.26 million(2017: Rs. 85.26 million).


48

16.1 Operating fixed assets

Owned assets Leased assets

Freehold Land Factory building Office building Plant and machinery

Furniture and fixtures

Tools and equipment

Electric installations Vehicles Moulds Fire fighting

equipment Total Plant and machinery Vehicles Total

Cost / revalued amount

Balance at 1 July 2016 865,653,836 1,461,162,015 49,281,810

4,558,291,599 7,719,239 5,132,536 40,131,103

74,562,715 186,823,858 1,813,762 7,250,572,473 57,302,277

-

7,307,874,750Additions 2,132,750

44,741,420

-

149,166,828 402,632

-

11,402,702 42,724,711 43,716,873 26,000 294,313,916 -

3,761,000 298,074,916Disposals -

-

-

-

-

-

-

(19,337,546) -

-

(19,337,546) -

-

(19,337,546)Balance at 30 June 2017 867,786,586

1,505,903,435

49,281,810

4,707,458,427

8,121,871

5,132,536

51,533,805

97,949,880

230,540,731

1,839,762

7,525,548,843

57,302,277

3,761,000 7,586,612,120

Balance at 1 July 2017 867,786,586

1,505,903,435

49,281,810

4,707,458,427

8,121,871

5,132,536

51,533,805

97,949,880 230,540,731 1,839,762 7,525,548,843 57,302,277

3,761,000 7,586,612,120Additions 309,698,542

232,244,839

-

468,479,757 12,797,370 764,000 34,351,175 8,053,851 27,890,468 315,688 1,094,595,690 -

-

1,094,595,690Transfer in / (out) 50,000,000

50,000,000 (50,000,000)

-

-

Disposals --

--

--

(144,534) --

--

-- -

(7,575,355) --

--

(7,719,889) - -

(7,719,889)Balance at 30 June 2018 1,177,485,128

1,738,148,274

49,281,810

5,225,793,650

20,919,241

5,896,536

85,884,980

98,428,376

258,431,199

2,155,450

8,662,424,644

7,302,277

3,761,000 8,673,487,921

Rate of depreciation - % -

10% 5% 10% - 66.67% 10% 10% 10% 20% 30% 10% 10% 20%

Accumulated depreciation

Balance at 1 July 2016 -

464,505,405

40,550,306 1,780,841,049 4,555,040

1,779,057

18,559,049

34,954,573 121,378,565

148,624 2,467,271,668 16,201,722

-

2,483,473,390

Depreciation -

101,273,550

436,575 368,935,328 340,109

335,348

2,871,193 11,836,227 27,777,097

168,680 513,974,107 4,110,055

501,467

518,585,629

Disposals -

-

-

-

-

-

-

(9,041,411) -

-

(9,041,411) -

-

(9,041,411)

Balance at 30 June 2017 -

565,778,955

40,986,881

2,149,776,377

4,895,149

2,114,405

21,430,242

37,749,389

149,155,662

317,304

2,972,204,364 20,311,777

501,467

2,993,017,608

Balance at 1 July 2017 -

565,778,955

40,986,881

2,149,776,377

4,895,149

2,114,405

21,430,242

37,749,389

149,155,662

317,304

2,972,204,364

20,311,777

501,467

2,993,017,608

Depreciation --

101,118,534

414,764

360,914,123 757,090

354,847

4,083,379

12,418,494

27,193,608

154,876

507,409,715 2,906,263

651,907

510,967,885

Transfer in / (out) -

-

20,666,863

-

-

-

-

-

-

20,666,863 (20,666,863)

-

-

Disposals -

-

-

(116,760)

-

-

-

(4,304,932)

-

-

(4,421,692) - -

(4,421,692)

Balance at 30 June 2018 -

666,897,489

41,401,645

2,531,240,603

5,652,239

2,469,252

25,513,621

45,862,951

176,349,270

472,180

3,495,859,250

2,551,177

1,153,374

3,499,563,801

Carrying amounts

At 30 June 2017 867,786,586

940,124,480

8,294,929

2,557,682,050

3,226,722

3,018,131

30,103,563

60,200,491

81,385,069

1,522,458

4,553,344,479 36,990,500

3,259,533

4,593,594,512

At 30 June 2018 1,177,485,128

1,071,250,785

7,880,165

2,694,553,047

15,267,002

3,427,284

60,371,359

52,565,425

82,081,929

1,683,270

5,166,565,394 4,751,100

2,607,626

5,173,924,120

16.1.1

2018 2017Rupees

16.1.2 Depreciation charge for the year has been allocated as follows:

Cost of sales 25 499,907,571

505,203,343

Administrative expenses 26 3,156,726

4,125,563

Selling and distribution expenses 27 7,903,588

9,256,723

510,967,885

518,585,629

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - R u p e e s - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

RupeesNote

Freehold land, measuring 80.09 acres, is located at Kot Saleem and Baddo Muraday, Sheikhupura. The buildings on freehold land and other immovable assets of the Company are constructed / located at this freehold land. This includes land measuring 20.34 acres (162.69 kanals) purchased for further expansion in manufacturing facilities.

TGTARIQ G

LASS IND

USTRIES LTD

.

49

TGTARIQ G

LASS IND

USTRIES LTD

.

50

16.1.3 Disposal of operating fixed assets

Accumulated Written Sale Mode of depreciation down value proceeds disposal

Vehicles

Honda Civic LEA-13-5310 Mrs. Robina Sarwar 501,025 (99,866) 401,159 1,450,000 1,048,841 Negotiation Spouse of Key Management Personnel

Suzuki Mehran VXR LEA-17-7929 IGI Insurance Limited 778,080 (77,341) 700,739 700,000 (739) Negotiation Third PartyFecto Belarus Tractor Model-1998 Mr.Muhammad Ashraf 480,000 (473,198) 6,802 500,000 493,198 Negotiation Third PartyToyota Corolla Gli LED-12-2526 Khurram Imtiaz 349,850 (147,189) 202,661 1,355,000 1,152,339 Negotiation Third PartySuzuki Cultus LEE-12-1826 Muhammad Fahad Iqbal 194,000 (79,928) 114,072 615,000 500,928 Negotiation Third PartySuzuki Cultus LEF-12-1457 Muhammad Fahad Iqbal 180,100 (65,556) 114,544 630,000 515,456 Negotiation Third PartySuzuki Mehran LEF-12-4015 Muhammad Javaid 188,000 (68,053) 119,947 525,000 405,053 Negotiation Third PartySuzuki Cultus LE-12-7502 Syeda Lyla Hassan Zaidi 995,000 (730,906) 264,094 575,000 310,906 Negotiation Third PartySuzuki Cultus LEF-12-1459 Muhammad Fayyaz 180,100 (67,678) 112,422 680,000 567,578 Negotiation Third PartySuzuki Cultus LEF-12-1460 Muhammad Iqbal 188,000 (70,274) 117,726 665,000 547,274 Negotiation Third PartySuzuki Cultus LE-12-5121 Akhtar Mehmood 990,650 (737,235) 253,415 600,000 346,585 Negotiation EmployeesSuzuki Cultus LED-12-9903 Muhammad Nawaz 1,004,300 (707,549) 296,751 665,000 368,249 Negotiation Third PartySuzuki Cultus LEE-12-4340 Akbar Ali 201,400 (84,779) 116,621 675,000 558,379 Negotiation Third PartyToyota Corolla Gli LEC-12-845 Haider Ikhlaq 349,850 (154,695) 195,155 1,330,000 1,134,845 Negotiation Third PartySuzuki Cultus Vxr LE-12-7499 Shazeel Anjum 995,000 (740,688) 254,312 575,000 320,688 Negotiation Third Party

Plant & Machinery

Generator Ittefaq Engineering Services 144,534 (116,760) 27,774 505,000 477,226 Negotiation Third Party

2018 7,719,889 (4,421,695) 3,298,194 12,045,000 8,746,806

2017 19,337,546 (9,041,411) 10,296,135 25,505,000 15,208,865

16.1.4

16.1.5 The forced sale value of land based on latest revaluation report, as on 11 February 2016, is Rs. 732.64 million (2017 : Rs. 732.64 million)

Revaluation of freehold land was carried out under the market value basis. The latest revaluation was carried out on 11 February 2016. Had there been no revaluation, carrying value of land would havebeen Rs 410.99 million (2017: Rs. 101.3 million).

- - - - - - - - - - - - - - - - - - - - - - - - - - - - Rupees - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Particular of assets Particulars of Buyers Gain / (Loss) Relationship with the CompanyCost


51


16.2 Capital work in progress

Plant & machinery and civil works 143,327,484

146,408,308

Advances 16.2.1 145,859,896

176,949,981

289,187,380

323,358,289

16.2.1

17 Intangibles

ERP softwareCost 6,962,863

6,962,863

Accumulated amortization (4,525,862)

(3,133,289)

2,437,001

3,829,574

Amortization rate (%) 20% 20%

17.1 Amortization charge has been allocated as follows:

Administrative expense 26 1,392,573

1,392,573

18 Long term deposits

Deposit with leasing companies 5,397,095

11,135,906

Guarantee margin deposits 12,088,000

4,713,000

Others 21,797,173

21,811,327

39,282,268

37,660,233

19 Stores and spare parts

Stores 159,251,725

164,927,749

Spare parts 606,054,431

568,389,440

765,306,156

733,317,189

20 Stock in trade

Raw materials 327,862,442

338,339,077

Chemical and ceramic colors 121,146,824

36,801,836

Packing material 77,501,581

51,428,240

Work in process 100,623,111

75,709,436

Finished goods 618,747,319

923,715,827

1,245,881,277

1,425,994,416

21 Trade debts - considered good

Local debtors 637,126,128

655,701,506

Foreign debtors 21.1 20,743,872

20,016,119

657,870,000

675,717,625

This includes advance amounting to Rs. 46 million (2017: Nil) for purchase of land measuring 14 kanals for further expansion of manufacturing facilities.

22 Advances, deposits, prepayments and other receivables

Advances to suppliers - unsecured, considered good 109,801,859 60,314,540

3,960,945 2,356,100 Prepayments 27,318,594

21,401,988

Advance income tax 22.1 105,519,844

312,217,350

Sales tax - net 46,264,288

50,101,820

Security deposits 15,794,349

29,298,473

308,659,879

475,690,271

22.1 Advance income taxAdvance income tax 428,979,568

375,214,027

Provision for tax (323,459,724)

(62,996,677)

105,519,844

312,217,350

23 Cash and bank balancesCash in hand 4,452,437

5,218,160

Cash at bank Local currency

- Current accounts 189,317,135 191,594,152

Interest based deposits with conventional banks- Deposit and saving accounts 23.1 45,246,242

19,118,617

Profit based deposits with islamic banks- Deposit and saving account 23.1 122,091

118,869

234,685,468

210,831,638

Foreign currency - current accounts 15,691,194

5,448,042

254,829,099

221,497,840

Advances to staff against salary - unsecured, considered good


2018 2017 2018 2017Rupees Rupees Rupees Rupees

21.1 Sales against LC's, advances and cash against documents

Brazil 59,390,014

20,230,694

13,980,146

15,424

South Africa 15,582,849

36,711,038

2,057,301

2,184,363

Ghana 5,328,733

2,564,381

1,556,425

-

Cameroon 13,766,706

6,383,232

1,011,082

-

United Arab Emirates 26,734,244

17,270,650

711,500

2,622,749

Sri-Lanka 49,872,429

25,560,146

524,850

1,020,970

Afghanistan 68,408,919

44,438,207

400,000

3,377

Nepal 62,413,141

47,048,800

114,087

3,702,209

India 254,762,717

400,285,186

112,547

9,713,137

Tanzania -

3,578,403

93,436

93,436

Bahrain 2,554,647

1,344,530

78,409

3

Paraguay 4,493,217

6,196,423

69,932

4,277

United Kingdom 12,238,050

6,024,581

21,780

75,879

Jordan 1,442,222

-

7,782

-

Bangladesh 746,605

-

2,862

-

Ukraine 2,673,573

-

1,390

-

Algeria 2,574,988 - 344 -Saudi Arabia 85,273,297 43,709,552 - 512,688Hungry 603,199 528,519 - 24,987Iraq 1,168,580 9,426,501 - 20,769Turkey 8,882,690 1,323,182 - 7,489Argentina 5,125,434 1,408,949 - 5,309Spain - 1,349,352 - 4,878Taiwan - 618,472 - 3,801Cyprus - 1,463,850 - 374

684,036,254 677,464,648 20,743,872 20,016,119

BalanceSales

Note2018 2017

Rupees Rupees

Sales Balance

52


53

23.1 Mark up on deposit accounts ranges from 3.23% to 4.50% (2017: 2.31% to 3.75%) per annum.23.2 Cash and cash equivalents as at 30 June comprise the following:


Cash and bank balances 254,829,099

221,497,840

Running finance (877,442,602)

(577,274,627)

(622,613,503)

(355,776,787)

24 SalesLocal 13,659,067,823

10,859,152,949

Export 749,188,499

733,160,546

14,408,256,322

11,592,313,495

Less: Sales tax 2,105,703,468

1,679,895,367

Trade discounts 744,884

9,854,447

2,106,448,352

1,689,749,814

12,301,807,970

9,902,563,681

25 Cost of sales

Raw material consumed 2,515,358,070

2,030,714,427

Salaries, wages and other benefits 25.1 1,600,984,934

1,209,402,025

Fuel and power 3,478,192,580

2,697,240,030

Packing material consumed 751,552,186

677,632,532

Stores and spares consumed 630,900,699

430,333,991

Carriage and freight 43,921,977

43,457,600

Repair and maintenance 36,211,665

34,674,108

Travelling and conveyance 22,068,518

24,833,901

Insurance 10,721,058

10,369,803

Ijarah rentals 42,361,481

69,703,876

Postage and telephone 2,233,091

1,805,744

Rent, rates and taxes 37,887,806

29,242,725

Printing and stationery 845,258

709,891

Advertisement 1,194,930

766,641

Depreciation 16.1 499,907,571

505,203,343

Others 23,441,786

20,533,903

9,697,783,610

7,786,624,540

Work in processOpening stock 20 75,709,436

69,331,510

Closing stock 20 (100,623,111)

(75,709,436)

(24,913,675)

(6,377,926)

9,672,869,935

7,780,246,614

Finished goodsOpening stock 20 923,715,827

1,028,076,662

Closing stock 20 (618,747,319)

(923,715,827)

304,968,508

104,360,835

9,977,838,443

7,884,607,449

25.1 Salaries, wages and other benefits include Rs. 15.86 million (2017: Rs. 13.16 million)in respect of staff retirement benefit.


54

2018 201726 Administrative expenses Note Rupees Rupees

Salaries, wages and other benefits 26.1 113,081,674 93,245,233 Travelling expenses 4,894,945 4,296,602 Motor vehicle and insurance expenses 4,521,410 4,396,870 Postage and telephone 5,420,806 5,995,370 Printing and stationery 1,488,888 973,331 Rent, rates and taxes 11,003,327 7,406,201 Repair and maintenance 3,331,407 1,482,673 Legal and professional charges 12,434,839

13,959,673

Auditors’ remuneration 26.2 1,496,250

1,505,000 Advertisement 2,426,354

818,476

Utilities 4,187,740

3,577,236 Entertainment 1,869,474

1,871,910

Insurance 2,382,595

2,234,930

Subscription, news papers and periodicals 4,350,945

1,893,678


4,125,563


9,408,825

Donations 26.3 7,288,000

7,815,000

Amortization 17.1 1,392,573

1,392,573

Miscellaneous 15,406,753

10,267,070

212,612,830

176,666,214

26.1

2018 201726.2 Auditors’ remuneration Rupees Rupees

Audit fee 1,045,000

950,000

Half yearly review fee 150,000

150,000

Out of pocket expenses 226,250

205,000

Certification fee 75,000

200,000

1,496,250

1,505,000

26.3 None of the directors or their spouses have any interest in the donees.

27 Selling and distribution expenses

Salaries, wages and other benefits 27.1 135,770,963

104,525,052

Local freight and forwarding 147,424,081

112,074,459

Export freight and forwarding 47,274,710

45,952,462

Travelling expenses 25,896,522

28,276,800

Motor vehicle expenses 16,189,994

12,615,331

Postage and telephone 2,411,230

2,775,742

Printing and stationery 2,687,307

1,567,498

Advertisement, exhibitions and sales promotion 36,361,793

18,723,110

Rent and utilities 7,315,789

6,025,083


9,256,723


643,658

Breakage, samples and incidental charges 9,193,737

4,928,353

Miscellaneous 1,910,054 1,439,549442,597,841 348,803,820

27.1 Salaries, wages and other benefits include Rs. 4.02 million (2017: Rs. 3.43 million) in respectof staff retirement benefit.

Salaries, wages and other benefits include Rs. 2.75 million (2017: Rs. 2.6 million) in respect ofstaff retirement benefit.


55


28 Other operating income

Income from non-financial assetsGain on disposal of property, plant and equipment 16.1.3 8,746,806 15,208,865 Foreign exchange gain - net 3,683,760 583,343 Liabilities no longer payable written back - 5,863,723 Others - 84,521

12,430,566 21,740,452 Income from financial assets

Interest income on bank deposits with conventional banks 2,084,519 2,253,665

Profit income on bank deposits with islamic banks 3,398 3,398 14,518,483 23,997,515

28.1 This represents gain on actual currency conversion.

29 Other operating expenses

Workers' Profit Participation Fund 11.2 76,490,701 63,370,828 Workers' Welfare Fund 11.3 28,269,819 18,959,218

104,760,520 82,330,046 30 Finance cost

Mark-up based loans from conventional banks Long term finances 28,258,115 28,971,078 Short term borrowings 78,388,753 98,384,323 Finance leases 652,623 1,762,659

Islamic mode of financingShort term borrowings 25,679,680 40,973,084

132,979,171 170,091,144

Notional interest on unwinding of shareholders' loan - 67,537,095 Interest on Workers' Profit Participation Fund 11.2 9,199,369 4,273,014 Bank charges 8,887,280 5,995,097 Guarantee commission charges 2,397,500 1,170,800

153,463,320 249,067,150

31 Taxation

Income tax- current year 323,459,724 62,996,677 - prior years 59,660,298 48,021,248

Deferred tax (55,189,458) 314,378,154 327,930,564 425,396,079

2018 2017

31.1 Relationship between the tax expense andRupees Rupees

accounting profitProfit before taxation 1,425,053,499 1,185,086,517

Tax calculated at the rate of 30.00% / 31.00% 427,516,050 367,376,820

Tax effect of:- income under final tax regime (8,437,584) (9,784,037)

- super tax 41,994,412 40,901,914

- prior year adjustments 59,660,298

48,021,248

- tax credit utilised (130,229,763)

(19,288,370)

- rate difference (55,280,682)

-

- others (7,292,167)

(1,831,496)

327,930,564

425,396,079

31.2

Tax Years

Tax provision as per financial

statements

Tax as per assessment /

return

2015 - - 2016 39,140,104 87,161,352 2017 62,996,677 122,656,975

31.3

32 Earnings per share - basic and diluted2018 2017

Profit attributable to ordinary shareholders Rupees 1,097,122,935

759,690,438

Weighted average number of ordinary sharesoutstanding during the year Numbers 73,458,000

73,458,000

Earnings per share Rupees 14.94

10.34

32.1

The Board of Directors in their meeting held on October 01, 2018 have recommended a final cashdividend of Rs. 6.00 per share for the year ended 30 June 2018 to comply with therequirements of section 5A of the Income Tax Ordinance, 2001. Accordingly, no provision fortax in this respect has been made in these financial statements.

No figure for diluted earnings per share has been presented as the Company has not issuedany instruments carrying options which would have an impact on earnings per share when exercised.

The provision for current year tax represents tax on taxable income at the rate of 30%, net oftax credits. As per management's assessment, the provision for tax made in the financialstatements is sufficient. A comparison of last three years income tax provisions with taxassessment is presented below:


56


57

33 Financial instruments

- Credit risk- Liquidity risk - Market risk

33.1 Risk management framework

33.2 Credit risk

Exposure to credit risk


Long term deposits 39,282,268 37,660,233 Trade debts - considered good 657,870,000 675,717,625 Security deposits 15,794,349 29,298,473 Bank balances 250,376,662 216,279,680 963,323,279 958,956,011

The carrying amount of financial assets represents the maximum credit exposure. Themaximum exposure to credit risk at the balance sheet date was:

Credit quality of financial assets

The credit quality of financial assets that are neither past due nor impaired can be assessedby reference to external credit ratings or to historical information about counterparty.

The Company's activities expose it to a variety of financial risks:

The audit committee oversees compliance by management with the Company’s riskmanagement policies and procedures, and reviews the adequacy of the risk managementframework in relation to the risks faced by the Company.

Credit risk represents the accounting loss that would be recognized at the reporting date ifcounter-parties failed completely to perform as contracted. The Company does not havesignificant exposure to any individual counterparty. To manage credit risk the Companymaintains procedures covering the application for credit approvals, granting and renewal ofcounterparty limits and monitoring of exposures against these limits. As part of theseprocesses the financial viability of all counterparties is regularly monitored and assessed. Tomitigate the risk, the Company has a system of assigning credit limits to its customers basedon an extensive evaluation based on customer profile and payment history. Outstandingcustomer receivables are regularly monitored. Some customers are also secured, wherepossible, by way of cash security deposit.

The Board of Directors has overall responsibility for establishment and over-sight of theCompany's risk management framework. The audit committee is responsible for developingand monitoring the Company’s risk management policies. The committee regularly meets andany changes and compliance issues are reported to the Board of Directors.

Risk management systems are reviewed regularly by the audit committee to reflect changesin market conditions and the Company’s activities. The Company, through its training andmanagement standards and procedures, aims to develop a disciplined and constructivecontrol environment in which all employees understand their roles and obligations.

The Company's overall risk management policy focuses on the unpredictability of financial marketsand seeks to minimize potential adverse effects on the Company's financial performance.

(a) Long term deposits

(b) Trade debts - considered good


Foreign 20,743,872 20,016,119 Domestic 637,126,128 655,701,506

657,870,000 675,717,625

The aging of trade receivables at the reporting date is:

Not past due 598,661,700 614,903,039 Past due 0 - 60 days 19,736,100 20,271,529 Past due 61 - 90 days 32,893,500 33,785,881 Past due 91 - 120 days 6,578,700 3,648,875 Past due 120 days 3,108,301

657,870,000 675,717,625

(c) Security deposits

(d) Bank balances


Local currency:

- Current accounts 189,317,135

191,594,152 Markup based deposits with conventional banks

- Deposits and saving accounts 45,246,242

19,118,617 Profit based deposits with islamic banks

- Deposit and saving account 122,091

118,869 234,685,468

210,831,638

Foreign currency:

- Current accounts 15,691,194

5,448,042

250,376,662

216,279,680

Based on past experience the management believes that no impairment allowance isnecessary in respect of security deposits as there are reasonable grounds to believethat the security deposits will be recovered.

Customer credit risk is managed subject to the Company’s established policy,procedures and controls relating to customer credit risk management. Based on pastexperience the management believes that no impairment allowance is necessary inrespect of trade receivables as some receivables have been recovered subsequent tothe year end and for other receivables there are reasonable grounds to believe that theamounts will be recovered in short course of time.

The Company's exposure to credit risk against balances with various commercialbanks is as follows:

Long term deposits represent mainly deposits with Government institutions, leasingcompanies and financial institutions, hence the management believes that noimpairment allowance is necessary in respect of these long term deposits.

The trade debts as at the balance sheet date are classified in Pak Rupees. The agingof trade receivables at the balance sheet date is as follows:


-

58


2018Short term Long term Agency Rupees

AlBaraka Bank (Pakistan) Limited PACRA 3,971,552 Allied Bank Limited PACRA 1,000

Askari Bank Limited PACRA 7,326,000 Bank AL Habib Limited PACRA 20,140,584 Bank Alfalah Limited PACRA 69,903,591 Bank Islami Pakistan Limited PACRA 784,118 Faysal Bank Limited PACRA 25,672,128 MCB Bank Limited PACRA 29,350,287 National Bank of Pakistan PACRA 12,290,048 SME Bank Limited PACRA 204,594 Standard Chartered Bank (Pakistan) Limited PACRA 1,680,801 The Bank of Khyber PACRA 3,264,235

The Bank of Punjab PACRA 6,677,112

Habib Bank Limited JCR-VIS 27,276,157

Meezan Bank Limited JCR-VIS 10,849,719

United Bank Limited JCR-VIS 30,934,809

Sindh Bank Ltd

AAAAAA+AA+AA+A+AA

AAAAAAB-

AAAA

AAAAAAA+AAAAA

A1A1+A1+A1+A1+A1

A1+A1+A1+

BA1+A1

A1+A-1+A-1+A-1+A-1+ JCR-VIS 49,927

250,376,662

2017Short term Long term Agency Rupees

Bank Alfalah Limited A1+ AA+ PACRA 82,981,589

The Bank of Khyber A1 A PACRA 5,501,300

The Bank of Punjab A1+ AA PACRA 5,493,154

MCB Bank Limited A1+ AAA PACRA 33,070,764

National Bank of Pakistan A1+ AAA PACRA 6,776,713

United Bank Limited A-1+ AAA JCR-VIS 16,077,267

Habib Bank Limited A-1+ AAA JCR-VIS 40,183,082 Faysal Bank Limited A1+ AA PACRA 8,033,842

NIB Bank Limited A1+ AA- PACRA 5,721,313

Bank Islami Pakistan Limited A1 A+ PACRA 431,167

Meezan bank Limited A-1+ AA JCR-VIS 2,643,723

Askari Bank Limited A1+ AA+ PACRA 415

Albarka Bank Limited A1 A PACRA 727,448

Bank Al Habib Limited A1+ AA+ PACRA 6,409,364

Sindh Bank Limited A-1+ AA JCR-VIS 1,227,539

SME Bank Limited B B PACRA 1,001,000

216,279,680

Due to the Company’s long standing business relationships with these counterparties andafter giving due consideration to their strong financial standing, management does not expectnon performance by these counter parties on their obligations to the Company. Accordingly,the credit risk is minimal.

Rating 2018

Rating 2017

The credit quality of Company's bank balances can be assessed with reference to externalcredit rating agencies as follows:

59

TGTARIQ G

LASS IND

USTRIES LTD

.

60

33.3 Liquidity risk

Financial liabilities

Long term loan-secured 715,620,311

807,785,636

88,323,746

85,707,945

280,598,829

353,155,116

-

Liability against assets subject to finance lease 3,713,456

3,883,600

1,313,345

1,313,345

1,256,910

-

-


965,569,970

965,569,970

-

-

-

-

Accrued markup 30,839,016

30,839,016

30,839,016

-

-

-

-

Short term borrowings 1,094,922,101

1,094,922,101

1,094,922,101

-

-

-

-

2,810,664,854

2,903,000,323

2,180,968,178

87,021,290

281,855,739

353,155,116

-


Long term loan-unsecured 448,790,769

513,330,707

89,335,345

49,744,239

114,947,994

259,303,129

-

Liability against assets subject to finance lease 18,423,635

19,320,018

7,728,063

7,728,063

2,716,253

1,147,639

-


709,131,188

709,131,188

-

-

-

-

Accrued markup 27,534,642

27,534,642

27,534,642

-

-

-

-

Short term borrowings 2,154,261,108

2,154,261,108

2,154,261,108

-

-

-

-

3,358,141,342

3,423,577,663

2,987,990,346

57,472,302

117,664,247

260,450,768

-

33.4 Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of currency risk,interest rate risk and other price risk.

It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amount.

One to two years

Two to Five years

More than five years

Six monthsor less

Six to twelve months

Following is the maturity analysis of financial liabilities as at 30 June:

------------------------------------------------------------------------------Rupees------------------------------------------------------------------------------

More than five years

------------------------------------------------------------------------------Rupees------------------------------------------------------------------------------

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company's approach to managing liquidity is to ensure, as far aspossible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions. For this purpose the Company has sufficient runningfinance facilities available from various commercial banks to meet its liquidity requirements. Further liquidity position of the Company is closely monitored through budgets, cash flowprojections and comparison with actual results by the Board.

2017Carrying Amount

Contractualcash flows

Six monthsor less

Six to twelve months

One to two years

Two to Five years

2018Carrying Amount

Contractualcash flows


61

33.4.1 Currency risk

Exposure to currency risk

The Company’s exposure to foreign currency risk at the reporting date was as follows:


Foreign debtors 20,743,872 20,016,119 Foreign currency bank accounts 15,691,194 5,448,042 Gross balance sheet exposure 36,435,066 25,464,161

The following significant exchange rates have been applied:

2018 2017 2018 2017

USD to PKR 113.20 104.58 121.50 105.00

Sensitivity analysis:


Effect on profit and loss

US Dollar (3,643,507) (2,546,416)

33.4.2 Interest rate risk

The Company is exposed to currency risk to the extent that there is a mismatch between thecurrencies in which advances, sales and purchases and bank balances are denominatedand the respective functional currency of the Company. The functional currency of theCompany is Pak Rupee. The currencies in which these transactions are primarilydenominated is US dollars.

Average rate Reporting date rate

Interest rate risk is the risk that fair values or future cash flows of a financial instrument willfluctuate because of changes in interest rates. Sensitivity to interest rate risk arises frommismatch of financial assets and financial liabilities that mature or re-price in a given period.

At reporting date, if the PKR had strengthened by 10% against the foreign currencies with allother variables held constant, profit before tax for the year would have been (lower) / higherby the amount shown below, mainly as a result of net foreign exchange loss on translation offoreign debtors and foreign currency bank account.

The weakening of the PKR against foreign currencies would have had an equal but oppositeimpact on profit before tax.

33.4.2(a) Fixed rate financial instruments

Variable rate financial instruments

Financial assets


Financial assets


----------------------------------------Rupees---------------------------------

Long term loans from banking companies-secured - 715,620,311 - 448,790,769Short term borrowings - 1,094,922,101 - 2,154,261,108Liabilities against assets subjectto finance lease - secured - 3,713,456 - 18,423,635Deposit and saving accounts 45,368,333 - 19,237,486 -

45,368,333 1,814,255,868 19,237,486 2,621,475,512

Cash flow sensitivity analysis for variable rate instruments

2018 2017Increase of 100 basis points

Variable rate instruments (17,688,875) (26,022,380)

Decrease of 100 basis points

Variable rate instruments 17,688,875

26,022,380

33.4.3 Other price risk

Other price risk is the risk that the fair value or future cash flows of a financial instrument willfluctuate because of changes in market prices (other than those arising from interest rate riskor currency risk). The Company is not exposed to any price risk as there are no financialinstruments at the reporting date that are sensitive to price fluctuations.

A reasonably possible change of 100 basis points in interest rates at the reporting datewould have (decreased) / increased profit by amounts shown below. The analysis assumesthat all other variables, in particular foreign exchange rates, remain constant.

The Company does not have any fixed interest / mark-up bearing financial instruments as atreporting date.

- - - - - - Rupees - - - - - - -

Profit

The sensitivity analysis prepared is not necessarily indicative of the effects on profit for theyear and the outstanding liabilities of the Company at the year end.

20172018

The effective interest / mark-up rates for interest / mark-up bearing financial instruments arementioned in relevant notes to the financial statements. The Company's interest / mark-upbearing financial instruments as at the reporting date are as follows:


62


63

33.5 Fair values

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Underlying the definition of fair value is the presumption that the Company is a going concern without any intention or requirement to curtail materially the scale of its operations or to undertake a transaction on adverse terms.

The fair value of financial assets and liabilities traded in active markets i.e. listed equity shares are based on the quoted market prices at the close of trading on the period end date. The quoted market prices used for financial assets held by the Company is current bid price.

A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm's length basis.

IFRS 13, 'Fair Value Measurements' requires the Company to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels

- Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date (level 1). - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (level 2). - Unobservable inputs for the asset or liability (level 3).

The following table shows the carrying amounts and fair values of financial instruments and non-financial instruments including their levels in the fair value hierarchy:

Fair value measurement of financial instruments

Loans and receivables at amortized cost

Financial liabilities at

amortized costTotal Level 1 Level 2 Level 3

On-Balance sheet financial instruments Note

Financial assets not measured at fair valueLong term deposits 39,282,268 -

39,282,268 -

- -Trade debts 657,870,000 -

657,870,000 -

- -Security deposits 15,794,349 -

15,794,349 -

- -Cash and bank balances 254,829,099 -

254,829,099 -

- -33.5.1 967,775,716

-

967,775,716

-

- -

Financial liabilities not measured at fair value Long term loans - secured - 715,620,311 715,620,311 - - - Liabilities against assets subject to finance lease - 3,713,456 3,713,456 - - - Trade and other payables - 965,569,970 965,569,970 - - - Accrued mark-up - 30,839,016 30,839,016 - - - Short term borrowing - 1,094,922,101 1,094,922,101 - - -

33.5.1 - 2,810,664,854 2,810,664,854 - - -

2018Carrying amount Fair value

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Rupees - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - -


64

34 Capital management

The Board’s policy is to maintain an efficient capital base so as to maintain investor, creditor and market confidence and to sustain the future development of its business. The Board of Directors monitors the return on capital employed, which the Company defines as operating income divided by total capital employed. The Board of Directors also monitors the level of dividends to ordinary shareholders. The Company's objectives when managing capital are: (i) to safeguard the entity's ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders, and (ii) to provide an adequate return to shareholders.

The Company manages the capital structure in the context of economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, issue new shares, or sell assets to reduce debt.

Neither there were any changes in the Company’s approach to capital management during the year nor the Company is subject to externally imposed capital requirements.

33.5.1 Fair value versus carrying amounts

The Company has not disclosed the fair values of these financial assets and liabilities as these are for short term or repriced over short term. Therefore, their carrying amounts are reasonable approximation of fair value. 33.5.2 Fair value of freehold land

Freehold land has been carried at revalued amount determined by independent professional valuer (level 3 measurement) based on their assessment of the market. The valuation expert used a market based approach to arrive at the fair value of the Company's land. The revaluation of the freehold land was based on inquiries from real estate agents and property dealers in near vicinity of the freehold land. The effect of changes in the unobservable inputs used in valuations cannot be determined with certainty, accordingly a qualitative disclosure of sensitivity has not been prepared in these financial statements.

Loans and receivables at amortized cost

Financial liabilities at

amortized costTotal Level 1 Level 2 Level 3

On-Balance sheet financial instrumentsNote

Financial assets not measured at fair valueLong term deposits 37,660,233 - 37,660,233 - - -Trade debts 675,717,625 - 675,717,625 - - -Security deposits 29,298,473 -

29,298,473 -

- -

Cash and bank balances 221,497,840 -

221,497,840 -

- -

33.5.1 964,174,171

-

964,174,171

-

- -

Financial liabilities not measured at fair value Long term loans - secured - 448,790,769 448,790,769 - - - Liabilities against assets subject to finance lease - 18,423,635 18,423,635 - - - Trade and other payables - 709,131,188 709,131,188 - - - Accrued mark-up - 27,534,642 27,534,642 - - - Short term borrowing - 2,154,261,108 2,154,261,108 - - -

33.5.1 - 3,358,141,342 3,358,141,342 - - -

2017Carrying amount Fair value

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Rupees - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - -

65



37 Provident FundSize of the fund / trust 116,232,875

100,267,236

Cost of investment made 109,863,221

94,956,670

2018 2017

Percentage of investment made 94.52% 94.70%


Fair value of investment 109,705,288

94,937,526

Break up of investments - based upon fair value

UBL Term Deposit Receipt 80,000,000

61,000,000

NBP NAFA Capital Protected Strategy 28,777,728

28,998,730

Deposit and saving accounts 927,560

4,938,796

109,705,288

94,937,526

- - - - - (Percentage) - - - - -

35 Operating segments The financial information has been prepared on the basis of a single reportable segment.

35.135.2 The sales percentage by geographic region is as follows:

2018 2017% %

Pakistan 94.0 92.6India 2.0 4.0Afghanistan 1.0 0.4Others 3.0 3.0

100 100

35.3 All non-current assets of the Company as at 30 June 2018 are located in Pakistan.

36 Plant capacity and actual productionThe actual pulled and packed production during the year are as follows:

2018 2017M. Tons M. Tons

Pulled production 253,418

251,780

Packed production 188,451

183,486

Sales from glassware products represent 100% (2017: 100%) of total revenue of the Company.

The capacity of plant is indeterminable because capacity of furnaces to produce glassware varieswith the measurement / size of glass produced.

66


2018 2017

Break up of investmentUBL Term Deposit Receipt 69% 61%NBP NAFA Capital Protected Strategy 25% 29%Savings account 1% 5%

---%age of size of fund---

The figures for 2018 are based on the audited financial statements of the Provident Fund.Investments out of Provident Fund have been made in accordance with the provisions of section218 of the Companies Act 2017 and rules formulated for this purpose.

38 Remuneration of Directors and Executives

Non Executive Directors Executives2018 2017 2018 2017 2018 2017

Managerial remuneration 9,026,437 6,420,000

-

28,233,848 21,374,304

House rent 3,857,952 2,592,000

-

- 12,524,710 9,495,511

Conveyance 6,548

12,000 -

- 196,800 156,000

Contribution to provident fund -

- -

- 2,783,269 2,110,114

Medical and other allowances 543,000

576,000 -

- 2,783,269 2,110,114

Utilities 857,323

-

-

- 2,783,269 2,110,114Remuneration to non-executive directors -

-

6,147,450

13,909,912 - -

Meeting fee -

-

175,000

- - -

14,291,260

9,600,000

6,322,450

13,909,912 49,305,165 37,356,157

Number of persons 2 1 3 4 18 14

In addition to the above benefits, some of the directors are also provided with free use of company maintained cars.

The aggregate amounts charged in the accounts for the year for remuneration, including all benefits to the chairman and managing

Chief Executive Officer / Executive Director

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - R u p e e s - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

39

Long term finances

Short term borrowings

Liabilities against assets subject to

finance lease

Unclaimed dividend

Balance as at 01 July 2017 448,790,769

1,576,986,481

18,423,635

4,145,933

2,048,346,818

Changes from financing activities

Receipts of long term finances - secured 379,329,542

-

-

-

379,329,542Repayments of long term finances - secured (112,500,000)

-

-

-

(112,500,000)Repayment of short term borrowings - net of receipts -

(1,359,506,982)

-

-

(1,359,506,982)Repayment of finance lease liabilities - - (14,710,179) - (14,710,179)Dividend paid - - - (303,626,193) (303,626,193)Total changes from financing cash flows 266,829,542 (1,359,506,982) (14,710,179) (303,626,193) (1,411,013,812)

Other changesDividend declared - - - 304,850,710 304,850,710Total liability related other changes - - - 304,850,710 304,850,710

Closing as at 30 June 2018 715,620,311 217,479,499 3,713,456 5,370,450 942,183,716

30 June 2018

Total

Liabilities

- - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - Rupees - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Reconciliation of movements of liabilities to cash flows arising from financing activities.

director, directors and executives of the Company are as follows:

40 Transactions with related parties


Industrial Products Investment Limited Shareholder Interest cost for the year - 704,850(0% equity held) Repayment of loan - 33,389,450

Repayment of markup on loan - 32,760,996

Omer Glass Industries Limited Associated company Purchases from related party - 3,068,610(Common directorship) Dividend paid during the year 32,095,104 20,881,152

M & M Glass (Private) Limited Associated company Dividend paid during the year 3,854,703 -(Common directorship)

Provident Fund Employee benefit plan Employer's contribution during the year 22,630,742 19,203,381

Rubina Sarwar Close faimly member of key

management personnel Sale proceeds of vehicle 1,450,000 -Akhtar Mehmood Key management personnel Sale proceeds of vehicle 600,000 -Shahzad Anwar Key management personnel Sale proceeds of vehicle - 2,550,000Abdul Ghaffar Khan Key management personnel Sale proceeds of vehicle - 1,100,000Mohsin Ali Key management personnel Sale proceeds of vehicle - 750,000Khawaja Israr Hassan Key management personnel Sale proceeds of vehicle - 1,100,000Malik Mehr Ali Key management personnel Sale proceeds of vehicle - 1,450,000

Mr. Tariq Baig (late) Ex - Managing Director Loan received from director - 40,000,000(25.4062% equity held) Remuneration paid 5,238,709 9,600,000

Dividend paid during the year 77,450,886 39,589,733Repayment of loan to director 315,277,160 103,321,720

Omer Baig Managing Director Loan received from director - 25,000,000(19.9702% equity held) Remuneration paid 40.1 13,200,000 9,172,800

Land purchased from director 107,119,945 -Dividend paid during the year 60,879,155 39,608,125Repayment of loan to director 259,985,050 64,218,928

Related parties comprises of associated companies, staff retirement fund, directors, key management personnel and other companies where directors have significant influence. Balanceswith the related parties are shown in respective notes to the financial statements. Significant transactions with related parties other than those disclosed elsewhere in the financial statementsare as follows:

NoteName Relationship Nature of transactions

Mansoor Irfani Director Dividend paid during the year 14,367 9,347(0.0047% equity held) Remuneration paid 40.1 - 2,183,400

Naima Shahnaz Baig Ex - Director Dividend paid during the year 2,657,643 1,729,069(0% equity held)

Akbar Baig Ex - Director Dividend paid during the year - 9,347(0.0047% equity held) Remuneration paid 40.1 - 1,124,544

David Jullain Ex - Director Dividend paid during the year - 9,347(0.0040% equity held) Remuneration paid 40.1 - 1,429,168

Naeem Nazir Ex - Director Dividend paid during the year - 1,350(0.0006% equity held)

Tajammal Husain Bokharee Director Dividend paid during the year 2,075 -(0.0007% equity held) Meeting fee Paid 75,000 -

Saad Iqbal Director Dividend paid during the year 954,500 -(0.3131% equity held) Meeting fee Paid 100,000 -

Mohammad Baig Director Dividend paid during the year 4,150,000 -(2.5289% equity held) Remuneration paid 40.1 2,000,000 -

Executives Key Management Personnel Remuneration paid 40.1 35,099,615 30,168,096

40.1 Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity. The Company considers allmembers of their management team, including the Chief Financial Officer, Chief Executive Officer, Directors and Head of Departments to be its key management personnel.


67

68


41 Number of employees

2018 2017

Number of employees other than factory as at 30 June 181 161Number of factory employees as at 30 June 733 657Average number of employees other than factory during the year 171 157Average number of factory employees during the year 699 640

42 Event after reporting date

43 Date of authorization for issue

These financial statements were authorized for issue on October 01, 2018 by the Board ofDirectors of the Company.

The total and average number of employees during the year and as at June 30, 2018 and 2017respectively are as follows:

No. of employees

The Board of Directors has proposed a final dividend of Rs.6.00 i.e. 60 % (2017: Rs. 4.15 per sharei.e. 41.50%) for the year ended 30 June 2018 in their meeting held on October 01, 2018 for approval ofthe members at the Annual General Meeting to be held on October 27, 2018 These financialstatements do not reflect these appropriations.




WAQAR ULLAH

69


FINANCIAL STATISTICAL SUMMARY

Year 2018 2017 2016 2015 2014 2013

Investment MeasuresShare capital Million RupeesShareholders equity Million RupeesProfit before tax Million RupeesProfit/(Loss) after tax Million Rupees

Dividend per share Rs.Earnings / (Loss) per share Rs.Break up value Rs.Price earning ratio Rs.

Measure of financial status

Current ratio RatioNumber of days stock DaysNumber of days trade debts Days

734.58

4,506.29

1,425.05

1,097.12

6.00

14.94

71.78

7.17

1.31:14620

734.58

3,714.02

1,185.09

759.69

4.15

10.34

60.99

10.71

1.10:16625

734.58

3,182.11

649.48

490.07

2.70

6.67

53.75

11.08

1.11:18539

734.58

2,701.65

362.09

408.22

-

5.56

41.61

10.53

1.08:172

34

734.58

2,298.94

15.59

(17.32)

0.50

(0.24)

36.13

(128.17)

1.00:168

33

693.00

2,083.60

152.55

367.36

-

5.30

36.42

4.15

1.03:167

21

Measure of performance

Return on capital employed % 17.48% 14.37% 9.22% 9.02% (0.38%) 8.01%Gross profit ratio % 18.89% 20.38% 20.98% 20.07% 14.53% 15.10%Profit before tax to sales ratio % 11.58% 11.97% 8.04% 4.50% 0.20% 3.92%Profit / (Loss) after tax to sales ratio % 8.92% 7.67% 6.07% 5.08% (0.22%) 9.45%Debt equity ratio % 12.00% 9.44% 21.51% 27.46% 36.23% 39.78%

70


PATTERN OF SHAREHOLDINGAS AT 30 JUNE 2018

405 1

100

16,942

0.02%770 101

500

190,091

0.26%251 501

1,000

221,689

0.30%346 1,001

5,000

935,588

1.27%107 5,001

10,000

866,830

1.18%56 10,001

15,000

735,488

1.00%24 15,001

20,000

421,718

0.57%14 20,001

25,000

328,500

0.45%20 25,001

30,000

581,100

0.79%8 30,001

35,000

269,500

0.37%4 35,001

40,000

155,500

0.21%3 40,001

45,000

131,120

0.18%11 45,001

50,000

541,000

0.74%2 50,001

55,000

101,500

0.14%2 55,001

60,000

113,750

0.15%3 60,001

65,000

189,000

0.26%2 65,001

70,000

139,000

0.19%2 80,001

85,000

170,000

0.23%4 90,001

95,000

370,000

0.50%1 95,001

100,000

100,000

0.14%3 100,001

105,000

313,200

0.43%

3 105,001 110,000 324,800 0.44%1 110,001

115,000

115,000

0.16%

1 115,001

120,000

120,000

0.16%2 125,001

130,000

253,000

0.34%1 130,001

135,000

135,000

0.18%2 135,001

140,000

275,500

0.38%2 140,001

145,000

286,200

0.39%1 145,001

150,000

150,000

0.20%1 150,001

155,000

150,500

0.20%1 170,001

175,000

172,000

0.23%2 195,001

200,000

397,000

0.54%1 220,001

225,000

225,000

0.31%2 225,001

230,000

456,500

0.62%1 245,001

250,000

250,000

0.34%1 250,001

255,000

251,500

0.34%1 305,001

310,000

308,800

0.42%1 380,001

385,000

381,000

0.52%2 400,001

405,000

807,820

1.10%1 410,001

415,000

411,000

0.56%1 495,001

500,000

496,300

0.68%1 925,001

930,000

928,844

1.26%1 995,001

1,000,000

1,000,000

1.36%1 1,085,001

1,090,000

1,087,600

1.48%1 1,145,001

1,150,000

1,147,200

1.56%1 1,440,001

1,445,000

1,444,000

1.97%1 1,730,001

1,735,000

1,733,900

2.36%1 1,855,001

1,860,000

1,857,696

2.53%1 1,895,001

1,900,000

1,897,200

2.58%1 2,055,001

2,060,000

2,058,900

2.80%1 2,375,001

2,380,000

2,377,924

3.24%1 3,995,001

4,000,000

4,000,000

5.45%1 7,730,001

7,735,000

7,733,760

10.53%1 14,665,001

14,670,000

14,669,676

19.97%1 18,660,001

18,665,000

18,662,864

25.41%2080 73,458,000

100.00%

4.Number of shareholders Shares heldShareholding

From To Percentage

1. CUIN (Incorporation Number): 00064342. Name of the Company: Tariq Glass Industries Limited3. Pattern of holding of shares held by the shareholders as at: 30 June 2018


71

CATEGORIES OF SHAREHOLDERS AS AT 30 JUNE 2018

Shareholding Percentage(Number of Shares)

5.1) Directors, CEO, Their Spouse and Minor ChildrenManaging Director / CEO - Mr. Omer Baig 14,669,676

19.9702%

Directors - Mr. Mohammad Baig 1,857,696

2.5289%

- Mr. Mansoor Irfani 3,462

0.0047% - Mr. Tajammal Hussain Bokharee 500

0.0007%

- Ms. Rubina Nayyar 577

0.0008% - Mr. Saad Iqbal 230,000

0.3131%

- Mr. Faiz Muhammad 500

0.0007%Directors' spouse and their minor children -

-

16,762,411

22.8190%5.2) Associated Companies, undertakings and related parties

- M/s Omer Glass Industries Limited 7,733,760

10.5281% - M/s M & M Glass ( Private) Limited 928,844

1.2645%

- Mr. Tariq Baig (Late) 18,662,864

25.4062%27,325,468

37.1988%

5.3) NIT and ICP - M/s IDBL (ICP Unit) 18,500

0.0252%

5.4) Banks, Development Financial Institutions & Non-Banking Financial Institutions 4,227,849

5.7555%5.5) Insurance Companies 2,100

0.0029%

5.6) Modarbas and Mutual Funds 11,011,224

14.9898%5.7) Shareholders holding 10% or more shares

- Mr. Tariq Baig (Late) 18,662,864

25.4062% - Mr. Omer Baig 14,669,676

19.9702% - M/s Omer Glass Industries Limited 7,733,760 10.5281%

41,066,300 55.9045%

List of Shareholders holding 5% or more shares - Mr. Tariq Baig ( Late) 18,662,864 25.4062% - Mr. Omer Baig 14,669,676 19.9702% - Omer Glass Industries Limited 7,733,760 10.5281% - Summit Bank Limited 4,000,000 5.4453%

5.9) Others - Joint Stock Companies 3,466,451 4.7190% - Investment Companies & Cooperative Societies 98,254 0.1338% - Pension Funds, Provident Funds etc. 661,300 0.9002%

4,226,005 5.7530%

5.8) General Public - Local 9,477,023 12.9013% - Foreign 407,420 0.5546%

9,884,443 13.4559%

5. CATEGORIES OF SHAREHOLDERS


MANAGING DIRECTOR / CEOCNIC:

OMER BAIG


IMPORTANT NOTES FOR THE SHAREHOLDERS

Dear Shareholder(s)

Please go through the following notes. It will be appreciated if you please respond to your relevant portion at the earliest: Dividend Mandate: In terms of section 242 of the Companies Act, 2017 and SECP’s Circular No. 18 dated August 1, 2017, the listed companies are required to pay cash dividend electronically directly into the designated bank account of a shareholder instead of paying the dividend through dividend warrants. Therefore, it has become mandatory for all of our valued shareholders to provide the International Bank Account Numbers (“IBAN”s) and other details of their designated Bank Account. In this regard, please send the complete details as per below format duly signed along with valid copy of your CNIC at the address of the Share Registrar of the Company

(M/s Shemas International (Private)

Limited, 533 -

Main Boulevard, Imperial Garden Block, Paragon City, Barki Road, Lahore.

Phone No.: 0092-42-37191262; Email: [email protected]). In case shares of the members are held in CDC account then “Electronic Dividend Mandate Form” should be sent directly to the relevant broker / CDC Investor Account Services where Member’s CDC account is being dealt.

Folio No. / CDC Account No.:

Name of Shareholder:

CNIC Number of the Shareholder:

Title of Bank Account:

Bank Account Number:

IBAN Number:

Bank’s

Name:

Branch Code:

Branch Name & Address

Mobile Number:

Land Line Number:

Email Address:

Date:______________

_______________________

_________________________

Signature of the Shareholder CNIC (Copy Attached)

The above said form is available on website of the Company.

72

CNIC No.: Pursuant to the directives of Securities & Exchange Commission of Pakistan (SECP) inter alia vide SRO 779 (1) 2011 dated August 18, 2011, SRO 831(1)/2012 dated July 05, 2012, and SRO 19(1) 2014 dated January 10, 2014, it is necessary to mention the Member’s computerized national identity card (CNIC) number for the payment of dividend, members register and other statutory returns. Members are therefore requested to submit a copy of their valid CNIC (if not already provided) by mentioning their folio numbers to the Share Registrar of the Company failing which result in withholding of dividend payments to such members.

Deduction of Income Tax from Dividend under Section 150

The Government of Pakistan through Finance Act, 2018

has made certain amendments in Income Tax Ordinance, 2001 pertaining to

withholding of tax on dividend whereby different rates are prescribed for deduction of withholding tax on the amount of dividend paid by the companies. These tax rates are as under:

Category

Rate of Tax Deduction

Filers of Income Tax Returns

15%

Non-Filers of Income Tax Returns 20%

To enable the company to make tax deduction on the amount of cash dividend at normal rate

i.e. 15% for filers of income tax return

instead of higher rate

i.e. 20%

for non-filers of income tax

return, all the shareholders who

are the filers of income tax return and theirnames are not entered into the Active Taxpayers List (ATL) provided on the website of FBR

are advised to make sure that their names are entered into ATL before the first day of

book closure defined for the determination of entitlement

of the proposed dividend.

Moreover, according to clarification received from Federal Board of Revenue (FBR), withholding tax will be determined separately on 'Filer/Non-Filer' status of Principal shareholder as well as joint-holder (s) based

on their shareholding proportions, in case of joint accounts.

In this regard all shareholders who hold shares Jointly are requested to provide shareholding proportions of Principal shareholder and Joint-holder(s) in respect of shares held by them to the Shares Registrar, in writing as follows, at the earliest, otherwise it will be assumed that shares are equally held:


Sr.

Folio/ CD A/C #

Total Shares

Principal Shareholder

Joint Shareholder

Signature of Shareholder

Name & CNIC #

Shareholding Proportion

(No. of Shares)

Name & CNIC #

Shareholding Proportion

(No. of Shares)

(As per CNIC for CDC shareholder

and as per Company Record for Physical

shareholder)

1.

2.3.4.

5.

Date:______________

_______________________

_________________________

Signature of the Shareholder CNIC (Copy Attached)


73

In another clarification by Federal Board of Revenue, in order to avail exemption from withholding of tax available under Clause 47B of Part-IV of the Second Schedule and any other provision available under the Income Tax Ordinance, 2001, an exemption certificate must be required under section 159(1) of the Income Tax Ordinance, 2001 issued by concerned Commissioner of Inland Revenue. The said tax exemption certificate is required to be submitted to the Share Registrar of the Company before the first day of the book closure defined for the determination of payment of the proposed cash dividend otherwise tax on their cash dividend will be deducted.

The corporate shareholders having CDC accounts are required to have their National Tax Number (NTN) updated with their respective participants, whereas corporate physical shareholders should send a copy of their NTN certificate to the Share Registrar of the Company (M/s Shemas International Pvt. Ltd, 533 -

Main Boulevard,

Imperial Garden Block, Paragon City, Barki Road, Lahore. Phone No.: 0092-42-37191262; Email: [email protected]).

The shareholders while sending

NTN or NTN certificates, as the case may be, must quote company name and their respective folio numbers.

Annual Accounts:

Annual Accounts of the Company for the financial year ended June 30, 2018 have been placed on the Company's website -

www.tariqglass.com

Pursuant to SECP's SRO

787(I) 2014

dated September 8, 2014 regarding electronic

transmission of Annual Financial Statements, those shareholders who want to receive the Annual Financial Statements in future through email instead of receiving the same by Post are advised to give their formal consent along with their email address duly signed by the shareholder along with the copy of CNIC to the Share Registrar M/s Shemas International Pvt. Ltd.

Please note that this option is not

decisive, if any shareholder not wishes to avail this facility, you may ignore this

notice, and the

Annual Financial Statements will be sent by Post at your address.

Members desirous to avail this facility are requested to submit the request form duly filled to our Shares Registrar.

Request Form To Receive Financial Statements Through E-mailConsent for Circulation of Annual Audited Financial Statements through e-mail

Company Name: Tariq Glass Industries Limited

Folio No. /

CDC sub -account No.: _________________________________

E-mail Address:________________________________________________


CNIC No.:_____________________________________________________

74

Zakat Declaration:

Please note that Zakat will be deducted from dividends at source in accordance with Zakat and Ushr laws and will be deposited within the prescribed period with the relevant authority. In the event that you would like to claim an exemption, please submit your Zakat Declaration Form CZ -50 under the Zakat and Ushr laws and rules, with your Broker / CDC / Company’s Share Registrar (M/s Shemas International Pvt. Ltd, 533 - Main Boulevard, Imperial Garden Block, Paragon City, Barki Road, Lahore. Phone No.: 0092-42-37191262; Email: [email protected]). The shareholders who already have submitted their Zakat Declarations on the format other than the Zakat Declaration Form (CZ 50) are advised to reinforce their Zakat declarations by resubmitting Zakat Declaration Form (CZ 50) to the Share Registrar of the Company. The Zakat Declaration Form (CZ 50) is available on website of the Company. For any query / problem / information, the members may contact the company and / or the Share Registrar at the following phone numbers, email addresses -


75

Yours sincerely,

-sd- (Mohsin Ali)

Company Secretary

The above E-mail address may please be recorded in the members register maintained under Section 119 of the Companies Act, 2017. I will inform the Company or the Registrar about any change in my E-mail address immediately. Henceforth, I will receive the Audited Financial Statements along with Notice only on the above e-mail address, unless a hard copy has been specifically requested by me. ______________________________ Name and Signature of Shareholder (Attachment: Copy of CNIC)


Company Contact:

Mohsin Ali Company Secretary Tariq Glass Industries Limited. 128-J, Model Town Lahore . Ph. : +92-42-111343434 Fax :+92-42-35857692-93 Web:

Share Registrar: Mr. Imran Saeed Chief Executive Officer M/s Shemas International Pvt. Ltd. 533 - Main Boulevard, Imperial Garden Block, Paragon City, Barki Road, Lahore. Phone No.: 0092-42-37191262; Email: [email protected]


76


77

6.00(60%)


78

ÏZ~Zz /


79


80

BÐ

/ zßwG


81

Å


82


83


84

6.00(60%)

85



86


87

TARIQ GLASS INDUSTRIES LIMITED 128-J BLOCK, MODEL TOWN, LAHORE

FORM OF PROXY

Folio / CDC Account Number:___________________ Number of Shares:_______________ I / We ____________________________________________________________________

of________________________________________________________________________

be ing a member o f M /s Ta r i q G lass I ndus t r i es L im i ted he reby appo in t

Mr./Ms.______________________________________________________________________

of________________________________________________________________________

(the Folio / CDC Account Number of the person appointed as proxy is:______________)thas my / our proxy to attend, speak and vote for me / us and on my / our behalf at the 40

Annual General Meeting of the members of the Company to be held at 11:00 AM on Saturday the October 27, 2018 at Defence Services Officers' Mess, 71 – Tufail Road, Lahore Cantt and at any adjournment thereof.

Member’s Signature

Witness – 1 Witness – 2

NOTE: The form of proxy, in order to be effective, must complete in all aspects and received at the Registered Address of Company not later than 48 hours before the meeting. The form of proxy must be duly stamped, signed and witnessed.

Please affix Revenue Stamp of Rs. 5/- and deface it with your signature.

Signature

Name:

Address:

CNIC No.:

Signature

Name:

Address:

CNIC No.:

Signature

Name:

Address:

CNIC No.:


88

tg 24-9-2018 report - tariq glass industries€¦ · bankers national bank of pakistan habib bank...

Documents